Subsequent Events

9 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

Subsequent Events

NOTE 19. SUBSEQUENT EVENTS

Plan to Acquire BioSpecifics Technologies Corp.

On October 19, 2020, the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with Beta Acquisition Corp., a Delaware corporation and wholly-owned indirect subsidiary of the Company (Purchaser) and BioSpecifics Technologies Corp., a Delaware corporation and a commercial-stage biopharmaceutical company (BioSpecifics). Pursuant to the Merger Agreement, and on the terms and subject to the conditions thereof, Purchaser commenced a tender offer (the Offer) on November 2, 2020 to acquire all of BioSpecifics’ issued and outstanding shares of common stock (BioSpecifics Shares) at a purchase price of $88.50 per BioSpecifics Share (Offer Price), net to the holder thereof in cash, subject to reduction for any applicable withholding taxes and without interest.

Following the consummation of the Offer and subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement, Purchaser will merge with and into BioSpecifics, with BioSpecifics surviving as a wholly owned subsidiary of the Company, pursuant to Section 251(h) of the General Corporation Law of the State of Delaware without a vote of BioSpecifics’ stockholders (Merger). At the effective time of the Merger (Effective Time), and without any action on the part of the holders of BioSpecifics Shares, each BioSpecifics Share, other than any BioSpecifics Shares (i) owned at the commencement of the Offer and immediately prior to the Effective Time by the Company, Purchaser or BioSpecifics or any direct or indirect wholly-owned subsidiary thereof, (ii) irrevocably accepted for purchase pursuant to the Offer or (iii) owned by BioSpecifics stockholders who are entitled to demand and have properly and validly demanded their appraisal rights under Delaware law, will be automatically converted into the right to receive an amount in cash equal to the Offer Price, subject to reduction for any applicable withholding taxes and without interest.

The Company has had a strategic relationship with BioSpecifics since 2004. Under the terms of the relationship, BioSpecifics receives a royalty stream from the Company related to the Company’s collagenase-based therapies, which currently include XIAFLEX®, currently marketed by the Company for the treatment of Dupuytren’s contracture and Peyronie’s disease, and Qwo™ (collagenase clostridium histolyticum-aaes), the first FDA-approved injectable treatment for cellulite, which is expected to be launched in spring 2021.

In connection with the Merger Agreement, the Marital Trust U/W/O Edwin H. Wegman Dated 8-10-06 (Stockholder) entered into a support agreement with the Company and Purchaser (Support Agreement). The Support Agreement generally requires that the Stockholder validly tender all of its shares after commencement of the Offer and to vote against any action, agreement or transaction involving BioSpecifics that can impede, interfere with or prevent the consummation of the transaction. The Stockholder beneficially owned, in the aggregate, 935,073 BioSpecifics Shares, which represented approximately 12.7% of BioSpecifics’ total outstanding shares based on 7,344,955 outstanding shares as of October 28, 2020.

The transaction is expected to close in late 2020, subject to customary closing conditions, and the Company expects to fund the transaction with cash on hand. The estimated value of the transaction is approximately $540 million (net of approximately $120 million in estimated cash, cash equivalents and investments acquired) at the anticipated time of deal closure.