UK-based Indivior PLC (OTCMKTS:INVVY) (GB:INDV) has offered to buy U.S.-based Opiant Pharmaceuticals Inc. (NASDAQ:OPNT) for roughly $145 million. Indivior has proposed to pay upfront $20 per share for each outstanding share of Opiant. Following the news, OPNT stock skyrocketed over 126% in pre-market trading at last check, closer to the offer price.
Also, Indivior will pay an additional $8 per share to Opiant over a period of seven years, if the latter is able to gain approval and revenue thresholds for a potential overdose reversal medication.
The upfront offer price represents a 111% premium to Opiant’s closing price of November 11 and a 195% premium including the contingent value rights (CVRs) payment of $8 per share. The acquisition is approved by the boards of both companies. Further, the deal is expected to close in the first quarter of 2023, subject to shareholder and other regulatory approvals.
Here’s How Opiant Will Benefit Indivior
Both Indivior and Opiant manufacture medications for the treatment of overdose and addiction issues. Indivior manufactures Suboxone, a buprenorphine-naloxone formulation that reduces opioid cravings and overdose. Similarly, Opiant is known for Narcan, a nasal spray used for the treatment of opioid overdose.
Along with Narcan, Indivior is hoping to benefit from Opiant’s other drugs in the pipeline. These include a vaccine to treat heroin addiction, an injection for reversing cannabinoid overdose, as well as an implant for the treatment of opioid addiction.
Indivior expects sales of Suboxone alone to reach $405-$420 million in the current Fiscal year and the peak revenue from the drug is pegged at $1 billion. Notably, for Indivior, sales in the U.S. contribute approximately 78%. No wonder, the company wants to rope in a domestic player with promising drugs in the pipeline.
Opiant, on the other hand, a relatively smaller player, earned revenue of $3.9 million for the quarter ending June 30, 2022. Opiant plans to file for clearance of Narcan with the U.S. Food and Drug Administration (FDA) by the end of 2022. If approved, commercial sales from Narcan could jump to over $200 million, as projected by Indivior.
Is Indivior Stock a Good Buy?
On TipRanks, Indivior stock has a Moderate Buy consensus rating based on one Buy rating. The average Indivior price target of 2,200p implies 33.3% upside potential to current levels. Meanwhile, INDV stock has gained 35.8% so far this year.