WALTHAM, Mass. - Deciphera Pharmaceuticals , Inc. (NASDAQ: NASDAQ:DCPH), a biopharmaceutical company specializing in kinase inhibitors for cancer treatment, has agreed to a definitive merger with Japan's ONO Pharmaceutical Co., Ltd. (ONO). The agreement stipulates that ONO will acquire all outstanding Deciphera shares for $25.60 each in cash, totaling an equity value of approximately $2.4 billion.
The acquisition price represents a significant premium over Deciphera's recent share value, with a 74.7% increase over the closing price on April 26, 2024. The deal is structured as a tender offer followed by a merger, with the tender offer set to expire 20 business days after commencement, subject to certain conditions.
This strategic move is anticipated to boost ONO's oncology portfolio and expand its global presence, particularly in the United States and Europe. Deciphera's expertise in kinase drug discovery and its commercialization platform, including the FDA-approved gastrointestinal stromal tumor (GIST) treatment QINLOCK®, are key assets in the merger. The combined efforts of ONO and Deciphera aim to expedite the delivery of innovative drugs and enhance patient care worldwide.
Steven L. Hoerter, President and CEO of Deciphera, expressed the transaction's alignment with both companies' commitment to cancer patients, offering immediate value to shareholders and promising opportunities for employees. Gyo Sagara, ONO's CEO, echoed these sentiments, highlighting the acquisition's role in strengthening ONO's research and business development.
The transaction, which has received unanimous approval from both companies' boards of directors, is expected to close in the third quarter of 2024, pending U.S. antitrust clearance and the tender of a majority of Deciphera's outstanding common stock. Certain Deciphera stockholders representing approximately 28% of outstanding shares have agreed to tender their shares.
Post-acquisition, Deciphera will continue to operate as a standalone business within the ONO Group from its headquarters in Waltham, Massachusetts. In light of the merger, Deciphera has canceled its first-quarter 2024 earnings call but will file a Form 10-Q as scheduled.
J.P. Morgan Securities LLC and Goodwin Procter LLP are serving as advisors to Deciphera, while BofA Securities and Greenberg Traurig are advising ONO.
This report is based on a press release statement and contains forward-looking statements that involve risks and uncertainties. The tender offer for Deciphera's shares has not yet commenced, and this communication is not an offer to buy or a solicitation of an offer to sell any securities.
InvestingPro Insights
In the context of the recent acquisition announcement by ONO Pharmaceutical Co., Ltd., Deciphera Pharmaceuticals, Inc. (NASDAQ: DCPH) presents an interesting case for investors. The deal's premium price over the current market valuation reflects a strategic move by ONO to bolster its oncology portfolio with Deciphera's kinase inhibitors expertise. Here are some insights based on the latest data from InvestingPro:
With a market capitalization of approximately $1.2 billion, Deciphera's financial health is underscored by a balance sheet that holds more cash than debt, an InvestingPro Tip that indicates a level of financial stability. This could be a contributing factor to ONO's confidence in the acquisition. Moreover, Deciphera's liquid assets exceed short-term obligations, suggesting a solid position to meet immediate financial needs.
Despite this, Deciphera's financial performance has shown challenges, with a negative P/E ratio of -6.45 and a P/E ratio (adjusted) for the last twelve months as of Q4 2023 at -6.18. The company's gross profit margin for the same period stands at -45.61%, reflecting weak gross profit margins, another InvestingPro Tip that investors should consider. Furthermore, analysts do not anticipate the company will be profitable this year, underscoring the speculative nature of the investment.
Nonetheless, Deciphera has seen a large price uptick over the last six months, with a 44.33% total return, which may have contributed to the attractiveness of the acquisition for ONO. The company's recent share value surge aligns with the premium offer made by ONO, providing immediate value to Deciphera shareholders.
For those looking to delve deeper into Deciphera's financials and future outlook, InvestingPro offers additional insights. There are 6 more InvestingPro Tips available for Deciphera, which can be accessed at https://www.investing.com/pro/DCPH. To enhance your investment analysis with these insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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