Sun Pharmaceutical Industries Limited and Checkpoint Therapeutics, Inc. announced that they have entered into an agreement by which Sun Pharma will acquire Checkpoint, an immunotherapy and targeted oncology company.
Checkpoint is a Nasdaq-listed commercial-stage company focused on developing novel treatments for patients with solid tumor cancers. Checkpoint has received approval from the U.S. Food & Drug Administration (FDA) for UNLOXCYT™ (cosibelimab-ipdl) for the treatment of adults with metastatic cutaneous squamous cell carcinoma (cSCC) or locally advanced cSCC who are not candidates for curative surgery or curative radiation.
Dilip Shanghvi, Chairman & Managing Director of Sun Pharma, said, “Combining UNLOXCYT, an FDA- approved anti-PD-L1 treatment for advanced cutaneous squamous cell carcinoma, with Sun Pharma’s global presence means patients with cSCC may soon have access to an important, new treatment option. The acquisition further bolsters our innovative portfolio in onco-derm therapy.”
“I am proud of the dedication and passion of our team at Checkpoint that allowed us to achieve the first and only FDA-approved anti-PD-L1 treatment for patients with advanced cSCC, and we are excited to enter this transaction with Sun Pharma as the next step to bringing UNLOXCYT to cSCC patients in need of a differentiated immunotherapy treatment option,” said James Oliviero, President and Chief Executive Officer of Checkpoint. “Sun Pharma is aligned with Checkpoint’s commitment to improving the lives of skin cancer patients, and I believe this transaction will maximize value for our stockholders and provide accelerated access to UNLOXCYT in the United States, Europe and other markets worldwide.”
Upon completion of the transaction, Sun Pharma will acquire all outstanding shares of Checkpoint and Checkpoint stockholders will receive, for each share of common stock they hold, an upfront cash payment of 4.10 USD , without interest, and a non-transferable contingent value right (CVR) entitling the stockholder to receive up to an additional 0.70 USD in cash, without interest, if cosibelimab is approved prior to certain deadlines in the European Union pursuant to the centralized approval procedure or in Germany, France, Italy, Spain or the United Kingdom, subject to the terms and conditions in the contingent value rights agreement.
The upfront cash payment of USD 4.10 per share of common stock represents a premium of approximately 66.0% to Checkpoint’s closing share price on March 7, 2025, the last trading day prior to today’s announcement.
In connection with the transaction, Checkpoint, Sun Pharma and Fortress Biotech, Inc., Checkpoint’s controlling stockholder (“Fortress”; Nasdaq: FBIO), have entered into a royalty agreement, under which following the closing of the transaction Fortress would be entitled to receive royalty payments based on future sales of cosibelimab during a specified term, in lieu of royalty rights that were granted to Fortress in connection with its founding of Checkpoint.
In connection with the evaluation of Checkpoint’s strategic alternatives, the Checkpoint board of directors (the “Board”) formed a special committee of independent and disinterested directors (the “Special Committee”), which led the review and negotiations for this transaction. The Special Committee, with the assistance of its independent financial and legal advisors, conducted a comprehensive review of potential strategic alternatives available to Checkpoint and ultimately determined that the compelling and certain cash consideration and meaningful upside presented by the CVRs in this transaction provides superior risk-adjusted value relative to Checkpoint’s standalone prospects and other available alternatives. The Special Committee unanimously approved, and recommended that Checkpoint’s Board approve, the proposed transaction. After considering this recommendation, Checkpoint’s Board unanimously approved the proposed transaction. In arriving at its unanimous recommendation in favor of the transaction, the Special Committee considered several additional factors which will be outlined in public filings to be made by Checkpoint.
The transaction is expected to be completed in the second calendar quarter of 2025. The transaction is subject to customary closing conditions, including required regulatory approvals and approval by the holders of a majority of the voting power of outstanding shares of Checkpoint common stock, and by the holders of a majority of the shares of Checkpoint common stock that are not held by Fortress or by certain other affiliates of Checkpoint.
For the nine-month period ending September 2024, Checkpoint reported 0.04 million USD in revenue and a net loss of 27.3 million USD. The R&D expense for the nine-month period was 19.3 million USD. As of September 30, 2024, Checkpoint had a cash balance of 4.7 million USD, outstanding accounts payable and accrued expenses of 15.6 million USD, and outstanding accounts payable and accrued expenses – In connection with the transaction, Fortress, which holds a majority of Checkpoint’s outstanding voting power, has agreed to vote in favor of the transaction.
