Nasdaq-listed Cadence Pharmaceuticals has taken a minority stake in pain relief research company Incline Therapeutics as part of an option deal to acquire the company for up to $290m.
Cadence is primarily interested in Incline’s Ionsys, needle-free pain treatment. Incline acquired the rights to Ionsys from Alza, a subsidiary of healthcare company Johnson & Johnson, at the same time as signing the option with Cadence and agreeing $43m in a series A round from venture capital firms led by Frazier Healthcare Ventures.
Cadence floated on the Nasdaq stock exchange in 2006 and still has Frazier as one of its largest investors.
Cadence will pay Incline a $3.5m upfront option fee and a second $3.5m fee at the start of the second option period due within the next 12 months.
If Cadence agrees to buy Incline in the first option period it will pay up to $135m and no more than $228m during the second option period. There will also be up to $57m in extra fees to Cadence shareholders if Ionsys gains regulatory approval.
Cadence receives $500,000 of Incline’s series A preferred stock
Ted Schroeder, executive president of Cadence, has joined Incline’s board while David Socks, senior vice president of corporate development and strategy at Cadence, resigned to join Incline as its president and chief operating officer.
Alan Levy, chief executive of Incline, said: "Ionsys is an exceptional asset around which to form Incline Therapeutics."