Gurnet will put up $1.75 per share in cash and up to $4.90 in cash from a contingent value right, for a potential share value up to $6.65, the company said.
During the offer period, Gurnet said it plans to provide a $10 million term loan to Innocoll to continue development of its pain-relieving collagen matrix Xaracoll and cover the cost of a new drug application with the FDA.
Xaracoll is Innocoll’s late-stage surgically implantable and bioresorbable collagen matrix designed to provide sustained post-operative pain relieve through the controlled delivery of bupivacaine at the surgical site.
“Gurnet Point intends to work with Innocoll’s team to help bring Xaracoll to market by infusing substantial additional capital for its continued development and regulatory approval. We have great respect for Tony Zook and his team at Innocoll and look forward to investing in the business and assisting with the approval of Xaracoll and its commercialization,” said Christopher Viehbacher, Managing Partner at Gurnet Point Capital.
Innocoll received a refusal to file letter from the FDA last December for Xaracoll, with the agency indicating that the matrix should be characterized as a drug-device combination product and that additional clinical and nonclinical information on Xaracoll could be required. The company said it will look to conduct an additional short-term pharmacokinetic study and several short-term and non-clinical toxicology and biocompatibility studies to provide the information.
The company hopes for a resubmission by the end of the year, with hopes to begin commercialization by the end of 2018 if it receives approval.
“Having studied a number of strategic options over the past several months, our board and management team believe this strategic transaction will give Innocoll access to the financial resources it needs to pursue its goals of bringing Xaracoll through its development to commercialization, and address important unmet medical needs in the post-operative pain market. We believe that the combined leadership of the two companies, supported by Gurnet Point’s financial strength, will better position Innocoll to pursue a successful filing and subsequent commercialization of Xaracoll. The Innocoll directors unanimously support the offer, which represents a significant premium to the recent share price. In addition, the CVR allows shareholders to participate in the continued development of Xaracoll without further investment,” Innocoll chairperson Jonathan Symonds said in a prepared statement.
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