Major Pharma Move: Alfasigma Acquires Troubled Intercept Pharmaceuticals in a Whopping $800 Million Cash Deal

In a blockbuster move, Italian pharmaceutical giant Alfasigma S.p.A is set to acquire Intercept Pharmaceuticals, a renowned biotech specializing in rare and severe liver diseases, in a massive $800 million all-cash transaction.

This groundbreaking deal is poised to reshape the landscape of gastrointestinal and hepatology treatments, while significantly expanding Alfasigma’s footprint in the lucrative U.S. market.

At a remarkable $19 per share, this anticipated transaction offers a premium of 82% over Intercept’s closing stock price on September 25, 2023, making it a game-changer in the pharmaceutical arena. Alfasigma’s strategic move is set to bring Intercept’s prized asset, obeticholic acid (OCA), better known as Ocaliva, under its expansive pharmaceutical umbrella.

Ocaliva, the only approved second-line treatment for primary biliary cholangitis (PBC), has been experiencing impressive double-digit year-over-year growth, further solidifying its value.

This announcement follows Intercept’s recent setback in its quest for regulatory approval for the treatment of non-alcoholic steatohepatitis (NASH). In a blow to the company, the FDA rejected OCA tablets as a potential NASH treatment in June 2023, citing the need for additional data from the Outcomes portion of its Phase III trial.

In response, Intercept swiftly pivoted its strategy, refocusing on Ocaliva and a combination of OCA and bezafibrate for PBC treatment. This strategic realignment included significant workforce reductions to save $140 million annually, with an eye on potential profitability by 2024.

While Intercept’s stock value surged following the purchase announcement, with a notable 77.5% jump in Tuesday morning trading, it’s worth noting that this price is a far cry from its peak at $445 per share back in 2014. The acquisition is expected to be finalized by the close of 2023, marking a transformative chapter for both companies.

Financed entirely by Alfasigma’s existing cash reserves and corporate credit facilities, this deal received unanimous approval from both boards of directors. As Alfasigma is a privately owned entity, with over 75% ownership held by the Golinelli family, the acquisition will also transition Intercept into a private company, signaling the end of its public listing.

In the dynamic world of pharmaceuticals, this acquisition is nothing short of a seismic shift, with Alfasigma and Intercept poised to usher in a new era of medical advancements and patient care.

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