Vanda Pharmaceuticals (VNDA.O) has rejected a second takeover bid from UK-based Cycle Pharmaceuticals, which offered to acquire the company at $8 per share. Despite the offer representing an 80% premium to Vanda’s last closing price, the board of Vanda deemed the proposal insufficient, citing that it “substantially undervalues” the drugmaker and is not in the best interests of the company or its shareholders.
Cycle Pharma’s latest bid, which values Vanda at approximately $488 million, follows the rejection of a previous takeover attempt earlier this year. The offer came after a 4.5% drop in Vanda’s stock, driven by the U.S. Food and Drug Administration’s (FDA) decision to reject its drug for a digestive condition. However, Vanda’s board remains firm in its stance, having also turned down a revised bid from contract manufacturer Future Pak in June.
In a statement on Monday, Vanda reaffirmed its decision, stating that the terms of Cycle Pharma’s proposal were “economically identical” to the first offer, which had already been reviewed and declined. “The board has determined not to pursue the proposal,” Vanda said, signaling its commitment to defending the company’s value.
Cycle Pharma, on the other hand, expressed its willingness to engage further with Vanda’s leadership. “We stand ready to work immediately with Vanda’s board and management team to reach an agreement that would provide a compelling premium and certain cash value today for all Vanda shareholders,” the company said in a statement.
Vanda’s decision to adopt a shareholder rights plan, or “poison pill,” earlier this year further underscores its intention to resist hostile takeover attempts. This defensive mechanism was put in place to reduce the likelihood of unsolicited bids while the company navigates a challenging period following the FDA’s decision.
Vanda, which has three approved products—Hetlioz for sleep disorders, Fanapt for bipolar I disorder, and Ponvory for multiple sclerosis—continues to position itself as a strong player in the pharmaceutical space despite recent setbacks. The company’s stock has risen 11.37%, trading at $4.95, reflecting investor confidence following the news of the rejected offer.
As Vanda continues to focus on maximising its value, the question remains whether Cycle Pharma will return with an improved offer or if the biotech firm will explore other strategic avenues to strengthen its market position.
