Jaguar Animal Health Inc (NASDAQ:JAGX) recently announced that it signed a merger deal with Napo Pharmaceuticals, Inc. the Board of Directors of both, Jaguar Animal Health and Napo Pharmaceuticals unanimously approved the deal. According to the terms of transaction, Napo Pharmaceuticals shall operate as Jaguar Animal Health Inc’s fully owned subsidiary and shall focus on human health.
The financial terms of agreement
As per the deal involving merger of two companies, there shall be a 3-to-1 value ratio of Napo-to-Jaguar, so as to assess relative ownership of a newly formed combined company. The financial terms of agreement are binding. Until 31 January 2017, Napo Pharmaceuticals owned about 19% outstanding shares of common stock of Jaguar Animal Health Inc.
The two companies will share the management team so as to increase the efficacies and make value additions to the merged entity.
The president and CEO of Jaguar and interim CEO of Napo, Lisa Conte stated, “Upon the consummation of the merger, the two will realize a number of synergistic, value-adding benefits.” Lisa Conte added that the most crucial target to focus upon includes the revenue stream of prescription products, and “an expanded pipeline of important follow-on indications for Mytesi™ upon which to forge global partnerships.”
Benefit of the merger
The Jaguar- Napo merger will help the former with an access to revenue stream originating from the commercial business of sales of Mytesi, formerly called Fulyzaq. Mytesi is the prescription human drug, which is USFDA approved and is targeted for adults based symptomatic relief of noninfectious diarrhea. The medication is primarily meant for HIV/AIDS infected adults, who at present, are on their antiretroviral therapy.
Mytesi is a Napo product, which was launched in 2016 and the estimated potential U.S. market for this drug is about $100 million in gross annual sales. The two companies are hoping that the drug would fetch them $7.0 million in net sales in 2017.