US-based Sorrento Therapeutics’ subsidiary Scintilla Pharmaceuticals has entered into a binding term sheet to acquire pain specialist Semnur Pharmaceuticals for $200m.
Under the deal, Scintilla will pay Semnur's equity holders an initial payment of $60m, consisting of $40m in cash and $20m in shares of common stock of Sorrento.
Upon achievement of certain development, product approval and commercial milestones, cash consideration of up to $140m may additionally be paid by Scintilla to Semnur's equity holders.
Scintilla's lead programme is resiniferatoxin (RTX) for the treatment of intractable cancer pain.
Sorrento president and CEO Dr. Henry Ji said: "Semnur represents a unique asset for Scintilla that is highly complementary to its existing assets.
"Semnur's pipeline of multiple late-stage and near commercialisation product opportunities targets some of the largest pain markets available and addresses critical unmet medical needs.”
Semnur's lead product is a non-opiate, epidural steroid injectable to treat chronic back pain and is projected to commence Phase III clinical trials in 2017.
Following the acquisition, which is subject to customary closing conditions, key members of Semnur's management team are expected to join Scintilla's management team.
Sorrento received a fairness opinion from Joseph Gunnar & Co. LLC.
Dr. Ji further added: "Upon completion of the pending acquisitions and integrations of Semnur and Scilex, Scintilla will immediately become a truly unique pain management company, with a multiple product pipeline and an experienced management team led by Jaisim Shah from Semnur and Anthony Mack from Scilex."
Earlier this month, Scintilla entered into a binding term sheet to acquire Scilex Pharmaceuticals.
On completion of both acquisitions, Scintilla will operate as a stand-alone company with a focus on pain management.