Novo Holdings, Gurnet Point Capital to take antibiotics player Paratek private in $462M deal

Novo Holdings has long invested in companies developing antibiotics. Now, it wants to take the next step: Own part of a biotech that already has an antibiotic on the market.

The Danish player — which holds Novo Nordisk — is joining hands with Gurnet Point Capital to acquire Paratek and take it private in a deal valued at about $462 million.

Aleks Engel

“With this investment, we expand our commitment to tackling antimicrobial resistance, from supporting novel early-stage development with our REPAIR Impact Fund, late-stage development with our AMR Action Fund investment, and now commercialization with Paratek,” said Aleks Engel, partner at Novo Holdings, in a statement.

Paratek stockholders will get $2.15 in cash per share — a premium of 41% over its closing price on May 31 — and could stand to earn another $0.85 per share for a Contingent Value Right that kicks in if the company hits $320 million shares for its top product in a year by 2026.

It would mean almost tripling the 2022 sales of Paratek’s drug, Nuzyra, which stood at $136.8 million. The drug landed FDA approval to treat community-acquired bacterial pneumonia and acute bacterial skin and skin structure infections in 2018, and launched in 2019.

Stacey Seltzer

Paratek is also in the process of testing Nuzyra in a rare disease known as nontuberculous mycobacterial (NTM) pulmonary disease caused by Mycobacterium abscessus complex.

But its shares have been on a rollercoaster ride and are now down almost 80% compared to five years ago.

For Paratek shareholders, the buyout brings “immediate value and liquidity” as well as a stake in future success through the CVR, CEO Evan Loh said in a statement.

“We see an attractive opportunity to invest in and accelerate the commercialization of Nuzyra and to build a portfolio of additional value-creating assets to address significant unmet medical needs,” said Stacey Seltzer, partner at Gurnet Point.

Oaktree Capital Management is providing $175 million in debt financing to fund the deal.

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