Indian drugmaker Cipla Ltd said its subsidiary InvaGen Pharmaceuticals has received a notice of termination on a three year old agreement to buy Nasdaq-listed specialty pharmaceuticals company Avenue Therapeutics Inc.
In November 2018, Cipla through InvaGen had signed an agreement to acquire Avenue Therapeutics Inc. for as much as $215 million.
The termination notice was received since the second stage of the deal that was due to close April 2021 could not be completed as per the agreed timelines, Cipla said in a stock market disclosure on Wednesday.
InvaGen is evaluating the notice for any further steps that may be required to take in this regard, it said.
The existing shareholding of InvaGen in Avenue shall continue, Cipla said.
In the first stage, InvaGen or its affiliates had agreed to acquire a 33.3% stake in New York-based Avenue by buying new shares for $35 million. This stake was likely to consist of 5.83 million shares at $6 apiece.
In the second stage, InvaGen or its affiliates were to acquire the remaining shares of Avenue’s common stock for up to $180 million for about $13.92 per share, Cipla said. The second stage was scheduled be completed before April 2021.
Umang Vohra, managing director and global chief executive officer at Cipla, had said then that the investment in Avenue was in line with its stated intention to build a specialty pipeline in the US market.
Avenue focuses on the development and commercialization of intravenous Tramadol to manage post-operative pain.
According to Cipla's recent annual report, North America contributed $551 million, or 21%, to its total revenues in the last fiscal 2020-21.
