Celator Pharmaceuticals Inc (NASDAQ:CPXX) and Jazz Pharmaceuticals plc (NASDAQ:JAZZ) announced that they have entered into a definitive agreement for Jazz Pharmaceuticals to acquire Celator for $30.25 per share in cash, or approximately $1.5 billion.

The transaction with Celator is well-suited to advance Jazz Pharmaceuticals’ growth strategy.

  • VYXEOS is the first product candidate to demonstrate a statistically significant improvement in Overall Survival in patients with high-risk (secondary) AML1
  • U.S. FDA Breakthrough Therapy designation granted for VYXEOS2
  • U.S. FDA and European Commission Orphan Drug designation for VYXEOS for the treatment of AML
  • VYXEOS is an innovative product candidate based on the Celator CombiPlex® platform
  • Anticipated long-lived exclusivity for VYXEOS
  • Broadens Jazz Pharmaceuticals’ hematology/oncology portfolio
  • Worldwide development and commercialization rights to VYXEOS
  • Synergies with Jazz Pharmaceuticals’ commercial expertise and infrastructure
  • Transaction expected to close in the third quarter of 2016
  • Transaction expected to be accretive to Non-GAAP adjusted EPS beginning in 2018 and beyond

“Celator Pharmaceuticals is a strong strategic fit with Jazz Pharmaceuticals. VYXEOS will further diversify our product portfolio and is complementary to our clinical and commercial expertise in hematology/oncology,” said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals plc. “As Celator is currently preparing a regulatory submission in the U.S. for VYXEOS, this acquisition would add a new orphan product with the potential for short- and long-term revenue generation and expansion of our international commercial platform.”

“The planned combination of Jazz and Celator is highly complementary, as both companies are dedicated to bringing differentiated therapies to patients who have high unmet medical needs,” said Scott Jackson, chief executive officer of Celator Pharmaceuticals.  “We believe that Jazz Pharmaceuticals’ clinical and commercial expertise in hematology/oncology and existing international infrastructure will help realize the value of VYXEOS as a treatment to patients with AML.  After thoroughly evaluating our strategic options, our board of directors has unanimously determined that this all-cash transaction is in the best interest of our stockholders.”

Transaction Closing
The transaction is structured as a tender offer and second step merger.  The closing of the tender offer is conditioned upon customary conditions, including the tender of a majority of the outstanding shares of Celator common stock and expiration or termination of the Hart Scott Rodino waiting period.  The transaction is expected to close in the third quarter of 2016.

Certain stockholders of Celator holding approximately 18.4 percent of Celator’s outstanding shares of common stock, including executive officers, members of the Celator board of directors and certain investment funds affiliated with the members of the board of directors, have agreed to tender their shares in the tender offer. (Original Source)

Shares of Celator are up over 70% to $30.08 in pre-market trading.

On the ratings front, Celator has been the subject of a number of recent research reports. In a report issued on May 19, Roth Capital analyst Joseph Pantginis reiterated a Buy rating on CPXX, with a price target of $26, which represents a potential upside of 48.3% from where the stock is currently trading. Separately, on May 11, H.C. Wainwright’s Andrew Fein reiterated a Buy rating on the stock .

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Joseph Pantginis and Andrew Fein have a total average return of 0.2% and 8.0% respectively. Pantginis has a success rate of 37.7% and is ranked #2067 out of 3891 analysts, while Fein has a success rate of 47.1% and is ranked #435.

Celator Pharmaceuticals, Inc. is a clinical-stage company, which engages in the research and development of biopharmaceutical products. It intends to provide chemotherapies and molecularly targeted agents to deliver anti-cancer activity and enhance treatment outcomes for cancer patients. It operates under the CombiPlex platform. Its products include VYXEOS, CPX-1, and CPX-8.