After swooping in to pluck Jounce Therapeutics out of the clutches of another potential buyer, Concentra Biosciences could have been forgiven for thinking its next acquisition just weeks later would be another slam dunk. But the latest target, Atea Pharmaceuticals, is proving to be less obliging.
Setting out what it described as a “compelling offer” last week, Concentra and its CEO Kevin Tang of Tang Capital said they were willing to pay a 55% premium on Atea’s share price to fully acquire the company. Under the deal, Atea shareholders would also get a contingent value right to receive 80% of the net proceeds from any license or disposition of the biotech’s programs.
But Atea revealed this morning that its board had “unanimously rejected the unsolicited proposal.”
“After careful review and consideration with its independent financial and legal advisors, the Atea board of directors unanimously concluded that the proposal fundamentally undervalues the company and is not in the best interests of Atea or its shareholders,” the biotech said in a short statement.
Until this point, Tang had been on a roll, after having pulled off his company’s surprise decision to upend Redx Pharma’s long-planned acquisition of Jounce by making a successful bid of its own for the Cambridge, Massachusetts-based biotech.
Tang had been looking for a similarly speedy takeover of Atea, announcing last week that Concentra was hoping to quickly move through the due diligence process and close the deal by late July. Atea’s firm refusal has scuppered those plans.
Even with the boost that news of the potential acquisition made to Atea’s share price last week, it still sits at $4.68—below the $5.75 that Concentra was offering.
Atea’s belief in its own value may be explained by bemnifosbuvir, which the company is studying in high-risk outpatients with COVID-19 in a phase 3 study. The therapy was recently granted a fast-track designation by the FDA. Atea said earlier this month that it believes the antiviral could offer an “effective treatment to the millions of COVID-19 patients for whom the current standard of care is not a suitable option.”
Fierce Biotech has contacted Concentra to see whether Atea’s response marks the end of the road for the company’s ambitions for the COVID-focused biotech.