Viatris to acquire Oyster Point for $11 per share plus CVR up to $2.00 per share

Oyster Point Pharma (OYST) announced that it has entered into a definitive agreement under which Viatris Inc. (VTRS) would acquire Oyster Point Pharma. Viatris intends to acquire Oyster Point Pharma as the foundation of its new ophthalmology franchise, recognizing its uniquely talented team, the strength of TYRVAYA Nasal Spray and Oyster Point Pharma’s pipeline. Under the terms of the agreement, Viatris will commence a tender offer to purchase all outstanding shares of Oyster Point Pharma for $11.00 per share in cash at closing, plus a contingent value right for a potential cash payment of up to $2.00 per share upon achievement of specified performance targets by Oyster Point Pharma for full year 2022. The transaction was unanimously approved by the Oyster Point Pharma Board of Directors. In November 2021, Oyster Point Pharma launched TYRVAYA, the first and only FDA-approved nasal spray for the treatment of the signs and symptoms of dry eye disease. In addition, Oyster Point Pharma has a growing pipeline of clinical and pre-clinical programs aimed at delivering transformative innovation for ocular surface diseases. In addition to TYRVAYA, Oyster Point Pharma has three drug candidates in its pipeline: two investigational therapies for neurotrophic keratopathy, a severe degenerative condition affecting the nerves of the cornea, and another for vernal/atopic keratoconjunctivitis, a severe allergic condition of the eyes. Under the terms of the agreement, Viatris will initiate a tender offer to acquire all of the outstanding shares of Oyster Point Pharma’s common stock at a price of $11.00 per share in cash at closing, plus a contingent value right representing the right to receive a potential cash payment of up to $2.00 per share. The amount payable under the CVR will be based on the following performance targets to be achieved by Oyster Point Pharma for full year 2022: An additional $1.00 per share in cash if Oyster Point Pharma generates equal to or greater than $21.6 million of net product revenues and 131,822 total prescriptions of TYRVAYA; or An additional $2.00 per share in cash if Oyster Point Pharma generates equal to or greater than $24.0 million of net revenue and 146,469 total prescriptions of TYRVAYA. The transaction is subject to customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the tender of a majority of the outstanding shares of Oyster Point Pharma’s common stock. Oyster Point Pharma stockholders holding approximately 46% of Oyster Point Pharma’s common stock have entered into a tender and support agreement with Viatris, pursuant to which such stockholders have agreed, among other things, to tender 100% of their shares of Oyster Point Pharma’s common stock in the tender offer, subject to the terms and conditions of such agreement. Following the successful closing of the tender offer, Viatris will acquire all remaining shares of Oyster Point Pharma’s common stock that are not tendered into the tender offer through a second-step merger at the same price of $11.00 per share, plus a CVR representing the right to receive up to $2.00 per share. The transaction is anticipated to close during the first quarter of 2023.