Are Dova Pharma Investors Getting the Most Out of This Acquisition?

Health and Healthcare

Published: September 30, 2019 9:35 am

Last Updated: January 11, 2020 3:48 am

Dova Pharmaceuticals Inc. (NASDAQ: DOVA) shares jumped on Monday after the firm announced that it would be acquired by Swedish Orphan Biovitrum, or Sobi. Through this acquisition, Sobi is looking to expand its position as a leader in hematology and orphan diseases and expand its presence in the United States. Yet the question remains: Are Dova investors getting enough out of this acquisition?

The transaction was unanimously approved by the boards of directors of both companies and is expected to close in the fourth quarter of 2019.

Under the terms of the agreement, an indirect subsidiary of Sobi will commence a tender offer for all outstanding shares of Dova, whereby Dova stockholders will be offered an upfront payment for $27.50 per share in cash. This comes along with one non-tradeable contingent value right that entitles them to an additional $1.50 per share in cash upon regulatory approval of Doptelet for the treatment of chemotherapy-induced thrombocytopenia. Ultimately, this represents a total potential consideration of $29.00 per share, or up to $915 million.

The upfront consideration of $27.50 per share represents a premium of 36% to Dova’s closing price on September 27, and a premium of 59% to the 30-day volume weighted average price.

David Zaccardelli, Pharm.D., president and CEO of Dova, commented:

We are extremely pleased to announce this merger with Sobi, which we believe will continue the expansion of DOPTELET in the U.S., and provide the necessary resources to maximize DOPTELET’s availability to patients in both the US and internationally. On behalf of the Board of Directors, I’d like to thank our employees and shareholders for their continued support and dedication to our mission of providing novel and effective therapeutic options for patients with thrombocytopenia; we believe Sobi is ideally positioned to continue that mission.

Shares of Dova Pharma traded up over 38% Monday at $27.96, in a new 52-week range of $5.62 to $28.00. The consensus price target is $28.00.