<div><em>The acquisition is part of Sun Pharma's plan to set up a branded ophthalmic business in the US, reports <strong>CH Unnikrishnan</strong></em></div><div> </div><div>Sun Pharmaceutical Industries Ltd said on Wednesday (16 September) that it has signed a merger deal with US-based ophthalmic drug development company InSite Vision Inc for a total equity valuation of $48 million (Rs 319 crore).</div><div> </div><div>The loss-making InSite Vision currently focuses on developing new specialty ophthalmic products. This acquisition is part of Sun Pharma's plan to set up a branded ophthalmic business in the US. As part of this, Sun Pharma had also recently licensed an eye drop brand Xelpros.</div><div> </div><div>Under the terms of the agreement and plan of merger, an indirect wholly owned subsidiary of Sun Pharma will commence a tender offer for all of the issued and outstanding common stock of InSite Vision at a price of $0.35 per share in cash. According to Sun Pharma, it has valued the shares at a 30 per cent premium.</div><div> </div><div>"This potential acquisition is a part of our overall objective of transitioning to a specialty company. Besides Dermatology, we have identified Ophthalmics as one of the key segments for establishing our branded presence in the US," said Kal Sundaram, CEO of Sun Pharma’s North American business.</div><div> </div><div>The transaction value of $48 million on fully diluted basis plus related debt and other transaction costs are on the assumption that all shares of InSite Vision are tendered in the tender offer. The deal has been approved by the Boards of Sun Pharma subsidiary and InSite Vision.</div><div> </div><div>InSite Vision has at present developed two drug delivery platforms--DuraSite and DuraSite2, which are capable of extending the duration of drug retention, thus resulting in lower dosing frequency, and potentially enhanced efficacy. Based on this technology, InSite Vision has developed a pipeline of late-stage clinical candidates, and has recently filed a new drug application (NDA) with the US drug regulator for its product titled as BromSite for the treatment of inflammation and prevention of pain associated with cataract surgery. It also plans to file another NDA in 2017 for DexaSite for the treatment of non-bacterial blepharitis, a common ocular condition for which there is no approved product currently available. InSite's two other products AzaSite Plus and ISV-101 are currently in Phase-3 clinical development for the treatment of eye infections and in Phase 1/2 clinical development for dry-eye disease and inflammation respectively. </div><div> </div><div>The US drug developer has also commercialized its two products AzaSite and Besivance approved for the treatment of bacterial eye infections. For the 6-month period ended June 30, 2015, InSite Vision recorded revenues of $3.8 million, with an operational loss of $6.4 million and a net loss of $7.5 million.</div><div> </div><div>The acquisition/merger is subject to InSite Vision’s stockholders tendering at least a majority of their shares or, alternatively, its stockholders representing a majority of the outstanding shares voting to approve the transaction as required by applicable law, in addition to other customary closing conditions. The acquisition is expected to close in the fourth quarter of 2015, Sun Pharma said.</div><div> </div><div>Sun Pharma shares traded 2.09 per cent up at Rs 884.30 per unit on BSE in the morning trade on Wednesday, while the benchmark index- Sensex rose 0.71 per cent to 258887.53 points.</div><div> </div><div><strong>unni@businessorld.in</strong></div>
