On January 19, Zogenix, Inc. (ZGNX) along with UCB announced entering into a definitive agreement for the acquisition of ZGNX. Consequently, shares of the company skyrocketed by 56.91% premarket, at the last check on Wednesday.
During the previous regular session, ZGNX declined by 1.82% at its close of $15.64, on Tuesday. Following the announcement, the stock was trading at $24.54 at the time of writing in the premarket session.
Founded in 2006, the pharmaceutical company, Zogenix, Inc. has a market capitalization of $891.95 million. Currently, the company has 55.99 million shares outstanding in the market. Additionally, the ZGNX stock stands at a year-to-date loss of 3.75% while it lost 14.35% last year.
ZGNX and UCB Agreement
As per the definitive agreement between UCB and ZGNX, UCB will acquire the company. Furthermore, both the companies’ respective boards of directors unanimously approved the transaction. The terms of the agreement are as under:
- UCB will initiate a tender offer for buying all outstanding shares of the company through its wholly-owned subsidiary, Zinc Merger Sub, Inc.
- The per-share price for the purchase will be US$26.00 in cash at closing plus one non-tradable CVR. The contingent value right (CVR) for a potential cash payment of US$2.00 is dependent on EU approval of FINTEPLA® as orphan medicine for LGS (Lennox-Gastaut syndrome) treatment on or before December 2023.
- The value of the total transaction is approximately US$1.9 billion or 1.7 billion euros.
- The expected closing of the transaction is by the end of the second quarter of 2022, which is subject to certain specific conditions.
Moreover, ZGNX’s financial advisors for the transaction are BofA Securities and SVB Leerink. Additionally, Latham & Watkins LLP is the legal advisor of the company for the transaction.
The financial advisor of UCB are Lazard and Barclays, and Covington & Burling LLP is its legal advisor for the transaction.
Financial Analysis
On November 04, 2021, the company declared its financial results for the third quarter of 2021, which ended on September 30.
In the third quarter of 2021, the company generated revenue of $22.6 million, showing a sequential increase of 20%.
ZGNX incurred a net loss of $58.0 million in the third quarter of 2021, against $60.1 million in Q3 of 2020. Therefore, the net loss per basic and diluted share was $1.04 in the third quarter of 2021. Comparatively, the net loss per basic and diluted share was $1.08 in the year-ago quarter.
