Even as Satsuma Pharmaceuticals searched for a savior after a series of late-stage trial failures put its future in doubt, the U.S. biotech never lost faith in the potential of its migraine spray. Now, the Japanese company behind the tech used to deliver the spray has stepped in to keep the dream alive.
Shin Nippon Biomedical Laboratories has agreed to pay 91 cents in cash per share of Satsuma, a 40% premium on the closing price Friday of 65 cents apiece. On top of that, for each Satsuma share, existing shareholders will receive a contingent value right of up to $5.77 based on the future success on the licensing and commercial success of the spray.
The STS101 candidate, a dry-powder formulation of long-approved migraine drug dihydroergotamine, has flunked two phase 3 clinical trials in recent years. Satsuma gave up on plans to invest in commercializing STS101 itself and started last year to explore options for the business, before further analysis of the data persuaded the biotech it had the evidence to support FDA approval.
But when a deal for the business failed to materialize, the biotech laid off nine employees—a third of its workforce—last month to slow its cash burn.
Acquisition by SNBL, which created the delivery device technology used for STS101, is the “best strategic alternative for the biotech,” Satsuma CEO John Kollins said in the April 16 release. “We are pleased that SNBL shares our vision that STS101 has the potential to become an important and widely-prescribed acute treatment for migraine that can address the significant unmet needs of many people with migraine,” the CEO added.
SNBL President Ryoichi Nagata also said the company was “pleased to announce that SNBL will be involved in the launch of this novel intranasal drug, which was developed based on SNBL’s novel intranasal drug delivery platform technology, pending potential FDA approval.”
The Japanese company may not have to wait too long to find out whether its faith is well founded. Satsuma filed for approval of the candidate in the U.S. last month, pointing to secondary endpoints from a failed phase 3 trial such as freedom from pain and use of rescue medication as evidence that STS101 can improve outcomes.