Three months after an FDA approval for cancer immunotherapy Unloxcyt, Checkpoint Therapeutics has found a buyer.
Sun Pharma has agreed to purchase the Massachusetts biotech for an upfront value of $355 million, or $4.10 per share, the companies said Sunday.
With Unloxcyt, an FDA-approved PD-L1 therapy for advanced cutaneous squamous cell carcinoma, the acquisition is slated to bolster Sun’s oncology-dermatology franchise, Dilip Shanghvi, chairman & managing director of Sun, said in a statement. The Indian pharma plans to leverage its global presence to accelerate patient access to the drug.
The deal also includes a contingent value right tied to the potential approval of Unloxcyt in Europe. Worth up to $0.70 per share, this CVR could bring the total transaction value to about $416 million, according to a Checkpoint securities filing (PDF).
Besides Unloxcyt, Checkpoint is developing a third-generation EGFR inhibitor, olafertinib (formerly CK-101), for EGFR-mutated non-small cell lung cancer.
The deal price presents a 66% premium to Checkpoint’s closing price on Friday. Still, the oncology biotech’s share price was once worth many times more than its agreed-upon sale price. A 1-for-10 reverse stock split in 2022 didn’t significantly revert the company’s gradual share-price decline over the years.
Checkpoint once positioned Unloxcyt as a lower-cost alternative to existing PD-1/L1 options. But that low-cost model soon collapsed, marked by the downfall of EQRx, which coincidentally was also working on a PD-L1 inhibitor and an EGFR inhibitor until its absorption into Revolution Medicines in 2023.
Mostly known as a generics company, Sun Pharma has built a specialty business in dermatology, ophthalmology and oncology-dermatology, with 26 products altogether, according to a February company presentation.
In 2023, the Indian pharma acquired Concert Pharmaceuticals for $576 million to get its hands on a JAK inhibitor, which last year became FDA-approved Leqselvi, an alopecia treatment. That deal includes a CVR that’s linked to certain time-based sales milestones.
Meanwhile, Leqselvi's launch is now delayed as Sun and rival JAK drug developer Incyte are locked in a patent fight.
Fortress Biotech, which founded Checkpoint and holds a majority of Checkpoint’s voting power, has agreed to vote in favor of the Sun transaction. Sun and Checkpoint expect to close the deal by June.