The boards of directors of Tetraphase and AcelRx have each approved the second amendment to the Merger Agreement. Tetraphase’s board of directors has determined that as a result of the second amendment to the Merger Agreement with AcelRx, Melinta’s proposal is not superior and recommends the Merger Agreement, as amended by the amendment, to its stockholders.
Based on the closing price of AcelRx stock on May 28, 2020, the total upfront consideration to be received by Tetraphase equityholders is valued at approximately $37.0 million, with approximately $18.7 million of this amount allocated to the Company’s outstanding common stock warrants. In the merger, Tetraphase stockholders would also be entitled to receive, for each share of Tetraphase common stock, one non-tradeable CVR, the holders of which will be entitled to receive potential payments of up to an additional $16.0 million in cash in the aggregate upon the achievement of net sales of XERAVA™ in the United States, payable as follows: (i) $2.5 million upon annual net sales of $20.0 million during 2021, (ii) $4.5 million upon annual net sales of $35.0 million during any year ending on or before December 31, 2024 and (iii) $9.0 million upon annual net sales of $55.0 million during any year ending on or before December 31, 2024.
The special meeting of Tetraphase’s stockholders to approve the pending transaction is scheduled for June 8, 2020. The transaction is expected to close in June 2020, subject to specified closing conditions, including Tetraphase having a minimum amount of net cash as of the closing and approval by Tetraphase stockholders. Upon the closing of the transaction, Tetraphase will become a privately held company and shares of Tetraphase’s common stock will no longer be listed on any public market. Subject to certain limited exceptions, the CVRs will be non-transferable.