Martin Shkreli's biotech outfit Retrophin has proposed a buyout of struggling Transcept Pharmaceuticals ($TSPT) for $4 per share, but the management of Point Richmond, CA-based Transcept has undertaken a "poison pill" action to keep acquirers at bay.
A hedge fund veteran known for verbally punishing his biotech targets, Shkreli, the CEO of Retrophin, criticized the leadership of Transcept for rebuffing his company's attempts to discuss a buyout. Transcept also undertook a tax benefit preservation plan or "poison pill" that prevents Retrophin from acquiring more than 4.99% of its stock.
Retrophin, whose stock trades over the counter, has argued that its latest offer of the $4 per share in cash represented a 20% premium to the closing price of Transcept. Last week Retrophin attempted to begin talks at $3.50 per share, but Transcept's board quickly denied that bid and adopted the "poison pill" measure.
Last month Retrophin raised $25 million with the stated purpose of funding a licensing deal for a potential drug for autism and schizophrenia from an unnamed "major" pharma and other expenses. Yet Shkreli seems to have turned his focus to Transcept, which has FDA approval for an insomnia treatment called Intermezzo whose sales have been slow in the crowded sleep-drug market. Purdue Pharma markets Intermezzo.
Transcept has been looking for acquisitions to fuel its future, Retrophin said, adding that three investors in the company have publicly rebuked the buyout strategy.
"Our proposal represents an attractive premium to Transcept's trading performance, and we believe that the proposal offers a compelling opportunity for Transcept's stockholders, particularly in light of Transcept's risky and controversial acquisition strategy," Shkreli said in a statement. "We hope that Transcept's Board of Directors will respect its stockholders' wishes and quickly commence discussions with us regarding the proposed transaction."
In a letter to shareholders, Retrophin stated that it might be willing to pay more for Transcept if it can conduct due diligence and other conditions are met.
- here's the release