OSAKA, Japan and WALTHAM, Mass. - Ono Pharmaceutical Co., Ltd. has successfully concluded the acquisition of Deciphera Pharmaceuticals (NASDAQ:DCPH), Inc., a U.S. biopharmaceutical firm, in a tender offer that resulted in the purchase of all outstanding shares for approximately $2.4 billion. The transaction was completed on Monday, with Deciphera now a wholly owned subsidiary of Ono.
The tender offer, which began on May 13, 2024, culminated on June 10, 2024, with 88.25% of Deciphera's shares tendered and not withdrawn. Ono's subsidiary, Topaz Merger Sub, Inc., carried out the acquisition at a price of $25.60 per share in cash, net to the seller, and without interest, minus any applicable withholding taxes.
Following the tender offer's conclusion, Deciphera shares ceased trading on the Nasdaq and will be delisted. The merger is a strategic move for Ono, aiming to utilize Deciphera's research and development strengths in oncology and its commercial presence in Europe and the United States to bolster its pipeline and global growth strategies.
Gyo Sagara, Chairman and CEO of Ono, expressed satisfaction with the acquisition, emphasizing the expected acceleration of the company's expansion. Steven L. Hoerter, President and CEO of Deciphera, also welcomed the merger, anticipating significant contributions to Ono's growth as a global specialty pharmaceutical company.
Prior to the acquisition, Deciphera's capital stood at $805 thousand, with major shareholders including Brightstar Associates LLC and Redmile Group, LLC. The company was established in 2017, with its business primarily focused on the research, development, and commercialization of pharmaceuticals.
Deciphera's financial performance in the past three years has shown consistent revenue growth, with the latest fiscal year ending in December 2023 reporting $163.4 million. Despite this, the company faced operating and net losses over the same period.
Ono is currently assessing the financial impact of the acquisition on its business performance and will disclose any significant events in the future. This report is based on a press release statement from Ono Pharmaceutical Co., Ltd.
In other recent news, Deciphera Pharmaceuticals has been the focus of several analyst downgrades and a significant acquisition. Jefferies has moved its rating from Buy to Hold and adjusted the price target to $25.60, while Piper Sandler has downgraded the stock from Overweight to Neutral, raising its price target to $25.00.
These changes come in response to the announcement that Ono Pharmaceutical will acquire Deciphera for $25.60 per share in cash, a deal with a total equity value of approximately $2.4 billion.
The acquisition is expected to be completed by the third quarter of 2024. Jefferies highlighted that the merger is strategically beneficial, as Ono's broad cancer pipeline complements Deciphera's offerings. Deciphera's portfolio includes Qinlock, a treatment for second and fourth-line Gastrointestinal Stromal Tumors (GIST), and vimseltinib, an inhibitor for tenosynovial giant cell tumor (TGCT), both of which are projected to reach substantial sales figures.
Analysts from both Jefferies and Piper Sandler believe the stock's upside potential is now limited due to the fixed acquisition price. The acquisition is seen as a consolidation move within the pharmaceutical industry, aimed at enhancing Ono's cancer treatment pipeline through the integration of Deciphera's specialized and complementary cancer programs.
InvestingPro Insights
As Ono Pharmaceutical Co., Ltd. wraps up its acquisition of Deciphera Pharmaceuticals, Inc., investors and industry observers are keenly evaluating the financial metrics and market performance of the newly acquired entity. Deciphera, now operating as a wholly owned subsidiary of Ono, has shown a mixture of financial signals that merit attention.
InvestingPro data indicates that Deciphera holds a market capitalization of $2.21 billion, with a notable revenue growth of 26.51% in the last twelve months as of Q1 2024. This aligns with the consistent revenue uptick mentioned in the article, demonstrating the company's ability to increase sales. However, this growth comes with the backdrop of a negative gross profit margin of -38.66%, reflecting the costs outweighing revenues in the same period.
Two InvestingPro Tips that stand out in relation to the article include the company's cash position and analysts' outlook. Deciphera holds more cash than debt on its balance sheet, which could provide financial stability and flexibility post-acquisition. Additionally, two analysts have revised their earnings upwards for the upcoming period, suggesting optimism about the company's future performance.
For readers interested in a deeper dive into Deciphera's financials and market performance, InvestingPro offers additional tips. There are 12 more InvestingPro Tips available, which can be accessed through the InvestingPro platform at https://www.investing.com/pro/DCPH. To enrich your investment analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Despite the acquisition and potential for future growth, Deciphera is not expected to be profitable this year, according to analysts. The company's performance, including its strong return over the last year and its trading near the 52-week high, will be critical factors to watch as it integrates into Ono's operations.
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