Sun Pharma in the limelight

The stock is up after the company announced today morning that one of its subsidiaries has entered into an agreement and plan of merger with InSite Vision Inc. (InSite Vision) under which a Sun Pharma subsidiary has offered to acquire InSite Vision. InSite Vision focuses on developing new specialty ophthalmic products, including three late stage programs. Sun Pharma is in the process of establishing a branded ophthalmic business in the US.

This proposed acquisition of InSite Vision, coupled with the recent in-licensing of Xelpros™ (Latanoprost BAK-free eye drops) in June 2015, are steps in this direction. These deals give Sun Pharma access to four late stage branded ophthalmic products in the US.

Under the terms of the agreement and plan of merger, an indirect wholly owned subsidiary of Sun Pharma will commence a tender offer for all of the issued and outstanding common stock of InSite Vision at a price of US$0.35 per share in cash, a 30% premium to the implied price per share under the terminated ‘Amended and Restated Agreement and Plan of Merger’ between InSite Vision and a competing bidder for InSite Vision’s common stock based on the stock price of the competing bidder as of September 11, 2015. The transaction has a total equity value of approximately US$48 million on fully diluted basis plus related debt and other transaction costs assuming all shares of InSite Vision are tendered in the offer.

The transaction has been approved by the board of directors of the Sun Pharma subsidiary. InSite Vision’s board of directors has also approved the transaction and unanimously recommended that its stockholders tender their shares pursuant to the tender offer.