Acquisition of Avanir Pharmaceuticals, Inc. (AVNR) by Otsuka Pharmaceutical Co., Ltd. May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Avanir Pharmaceuticals, Inc. (NASDAQ: AVNR) by Otsuka Pharmaceutical Co., Ltd. On December 2, 2014, the two companies announced the signing of a definitive merger agreement pursuant to which Otsuka will acquire Avanir. Under the terms of the agreement, Avanir shareholders will receive $17.00 for each share of Avanir common stock they own.
Is the Proposed Acquisition Best for Avanir and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Avanir is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $17.00 merger consideration represents a premium of only 31.4% based on Avanir’s closing price on October 31, 2014. This premium is significantly below the average one-month premium of nearly 67.8% for comparable transactions within the past year. Further, the $17.00 merger consideration is significantly below the target price of $21.00 set by an analyst at Piper Jaffray on October 14, 2014, and the target price of $20.00 set by an analyst at Cowen and Company on December 1, 2014.
On August 5, 2014, Avanir released its earnings results for its third quarter 2014, reporting strong quarterly earnings. Total net revenues for the third quarter fiscal 2014 were $28.6 million, compared with $19.8 million for the comparable quarter in fiscal 2013, representing 45% year-over-year growth. Total net revenues for the first nine months of fiscal 2014 totaled $82.3 million, compared with $53.7 million for the first nine months of fiscal 2013. In commenting on these results, Avanir President and Chief Executive Officer Keith A. Katin remarked, “We had a great quarter across all aspects of our business. I am delighted with the positive outcome of our ANDA patent litigation, solid revenue growth of 45% year-over-year, and the positive interim data from our open label PRISM II study in PBA and COMPASS clinical trial in migraine. The future looks very promising as we are in the midst of expanding the sales force which should further accelerate revenue growth and we will announce data from our agitation and levodopa-induced dyskinesia trials later this year.”
In light of these facts, Robbins LLP is examining Avanir’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Avanir shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Avanir shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.