Jaguar, Napo in definitive merger accord

Jaguar Animal Health (NASDAQ:JAGX) and closely-held Napo Pharmaceuticals have entered into a definitive merger agreement by unanimous approval by the boards of both companies.

Under the accord, Jaguar’s stockholders and option and warrant holders calculated on a fully diluted basis as of today, but excluding approximately 365,437 shares issuable under securities convertible at $5.00 or more a share, will hold approximately 25% of the total outstanding fully diluted equity of Jaguar.

In February, the companies announced that the financial terms of the merger include an approximate 3-to-1 Napo-to-Jaguar value ratio to calculate relative ownership of the combined entity. As of Jan. 31, Napo owned approximately 19% of Jaguar’s outstanding common stock.

The merger will provide Jaguar with an important prescription revenue stream from sales of Mytesi (crofelemer 125mg delayed-release tablets). Mytesi is a human drug approved by the FDA for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy.

Napo launched Mytesi in October 2016. Napo and Jaguar estimate the potential U.S. market for Mytesi to be approximately $100-million in gross annual sales. Napo is deploying a direct sales effort to promote Mytesi to HIV prescribers in the second quarter of 2017, with both live representatives and telesales. As a result, Napo and Jaguar forecast that Mytesi is expected to generate approximately $7-million in net sales in 2017.

“We believe Jaguar and Napo together will be poised to realize a number of synergistic, value-adding benefits—most importantly a prescription product revenue stream—and an expanded pipeline of important follow-on indications for Mytesi upon which to forge global partnerships,” Lisa Conte, Jaguar's president and CEO, and Napo’s interim CEO, said in a statement.