Private equity buyout of TherapeuticsMD unravels as shareholders balk
Dive Brief:
- A private equity deal to take TherapeuticsMD private has unraveled, with the Florida-based drugmaker disclosing Wednesday it will terminate a planned merger with an affiliate of EW Healthcare Partners.
- In May, EW Healthcare Partners agreed to acquire TherapeuticsMD for $10 a share, or approximately $177 million. However, only 30% of shares were tendered to EW’s offer, falling short of the support required for the deal to be completed.
- With the merger set to be terminated, TherapeuticsMD said it “intends to maintain normal operations.”
Dive Insight:
With the initial agreement in May, EW intended to take TherapeuticsMD private, adding it to a women’s health portfolio that includes a majority stake in the French company Majorelle. Deal terms were unanimously approved by TherapeuticsMD’s board of directors.
EW’s offer valued TherapeuticsMD shares at a premium of 367%, nearly 5 times the $2.14 its shares traded at prior to the agreement.
News of the deal’s termination sent TherapeuticsMD shares falling by over 40% Wednesday.
TherapeuticsMD has been affected by the market downturn that’s weighed on the broader biotech industry. Shares rose as high as $22 apiece in March, but had declined to near $2 prior to the acquisition offer.
Just before the deal’s announcement, the Food and Drug Administration approved new testing specifications for TherapeuticsMD’s birth control ring product, Annovera. As a result, the company expects it can supply more rings beginning in the second and third quarter of 2022. The approval had pushed the company’s stock temporarily higher.
As of Wednesday afternoon, TherapeuticsMD shares were trading around $4.50 per share. The company was founded in 2008 and traded on over-the-counter markets before listing on the New York Stock Exchange and then Nasdaq.
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