Cycle Pharmaceuticals Goes All-In To Acquire Vanda Pharmaceuticals

Cycle Pharmaceuticals Ltd ("Cycle"), a proactive leader in the development of therapies for rare diseases, has publicly reiterated its intention to acquire all outstanding shares of Vanda Pharmaceuticals, Inc. at an all-cash price of $8.00 per share. This renewed offer aims to inform Vanda shareholders, especially considering the Vanda Board's ongoing refusal to engage despite receiving several premium proposals. 

Additionally, Vanda's recent unsuccessful attempt to gain FDA approval for tradipitant, following a Phase 3 trial that did not meet its primary endpoint, and the Board's recent actions that appear to limit shareholder rights, further underscore the importance of Cycle's proposal. Cycle's offer reflects an impressive 80% premium over Vanda's closing share price as of October 11, 2024, compared to a 58% premium calculated from Vanda's share price on June 5, 2024, just before Cycle announced its initial bid. This proposal places Vanda's fully diluted equity value at approximately $488 million.

On September 23, 2024, Cycle sent a letter to Vanda's Board of Directors reaffirming its desire to engage in a potential transaction. In response, on September 30, 2024, Vanda indicated that its Board was in the process of reviewing Cycle's proposal and required an additional two weeks for evaluation. However, on October 3, 2024, despite the ongoing premium offer from Cycle, Vanda’s Board took steps to amend and restate its bylaws, introducing measures that further entrenched its position. 

These modifications included changes concerning the scheduling of annual and special shareholder meetings, the nomination process for directors, and the Board’s authority to postpone or cancel meetings, as well as limitations on stockholder proposals and director nominees. Just two business days later, on October 7, 2024, Vanda's Board formally rejected Cycle’s offer.