LEO US Holding, a wholly-owned subsidiary of LEO Pharma A/S, entered into a definitive agreement to acquire Timber Pharmaceuticals (NYSEA:TMBR) in a total transaction value of up to $36-million.
Timber is eligible to receive an initial upfront consideration of $14-million and up to an additional $22-million in contingent value rights (CVRs), payable on achievement of certain milestones.
Timber expects the initial amount per share to be paid to Timber stockholders to be approximately $2.62 based on approximately 3.4 million shares of Timber common stock and restricted stock issued and outstanding as of August 20, 2023.
The CVRs that Timber stockholders will receive provide for the payment related to specific milestones for TMB-001, of which up to $12-million is related to FDA approval of TMB-001 by October 1, 2025 for the treatment of congenital ichthyosis, and up to $10-million, which is related to the first achievement of TMB-001 net sales exceeding $100-million within four consecutive calendar quarters by December 31, 2028.
“We are very pleased to deliver a transaction that will maximize long term value for Timber’s shareholders,” John Koconis, chairman and CEO of Timber, said in a statement. LEO Pharma is a leader in global dermatology.
“LEO’s expertise and global footprint make it the best choice to advance and achieve the full potential of Timber’s portfolio of product candidates,” he added. “We believe that LEO has the potential to establish TMB-001 as the standard of care in the treatment of congenital ichthyosis, a devastating, rare disease.
