Jaguar Animal Health Inc (NASDAQ:JAGX) an animal health company which specializes in the development, marketing and commercialization of gastrointestinal products for foals, production animals and high value horses has entered into a merger agreement with Napo Pharmaceuticals, Inc. the agreement was unanimously approved by both companies’ Board of Directors. Upon full execution of the agreement, Napo will become Jaguar’s fully owned subsidiary specializing in human health.
Among the terms of the agreement is a 3-to-1 Napo-to-Jaguar value ratio that will be the basis for calculating the ownership of the merged company. At the end of January, Napo had around 19% of all outstanding shares in Jaguar.
Jaguar’s president and CEO who also sums up as interim CEO of Napo Lisa Conte in a statement said it is an opportune moment to merge the two entities adding that the merger agreement will be in the best interest of both companies and their stockholders. She adds that upon completion of the merger, the two companies will experience value-adding benefits especially a stream of revenue from Mytesi™, a prescription product a prescription product initially called Fulyzaq. She expressed optimism that the two companies through the joint management team will increase efficiencies as well as increase value.
The combination of the two entities will offer Jaguar with an important opportunity to realize revenue stream from the sale of Mytesi™. Mytesi™ has been approved by the FDA for treatment of noninfectious diarrhea in HIV/AIDS infected adults on antiretroviral therapy. The drug was launched by Napo in October 2016. According to the two companies, the potential market for the drug in the U.S. is around $100 million.
Napo is using a direct sales initiative in an effort to promote the drug to HIV paints in the second quarter of 2017 with telesales and live representatives. Both companies have set the sales target from the drug at around $7.0 million in 2017. Mytesi™’s active pharmaceutical ingredient (API) is crofelemer. Napo is seeking global partnerships to develop, market and commercialize the drug. The company is still developing the drug for other potential antidiarrheal indications with investigational trials completed for cholera, irritable bowel syndrome, traveler’s diarrhea as well as in pediatric patients