Sun Pharma Acquires Checkpoint Therapeutics in $416M Deal, Bolstering Oncology-Dermatology Portfolio

Sun Pharma, the Indian pharmaceutical giant, has agreed to purchase Checkpoint Therapeutics, a Massachusetts-based biotech company, in a deal valued at up to $416 million. The acquisition, announced on Sunday, comes just three months after Checkpoint received FDA approval for its cancer immunotherapy drug, Unloxcyt.

Deal Structure and Financial Details

The transaction includes an upfront payment of $355 million, or $4.10 per share, representing a 66% premium to Checkpoint's closing price on Friday. Additionally, the deal incorporates a contingent value right (CVR) worth up to $0.70 per share, tied to the potential approval of Unloxcyt in Europe. This CVR could bring the total transaction value to approximately $416 million.

Fortress Biotech, which founded Checkpoint and holds a majority of the company's voting power, has agreed to support the acquisition. Sun Pharma and Checkpoint expect to close the deal by June 2025.

Strategic Implications for Sun Pharma

The acquisition of Checkpoint Therapeutics is set to strengthen Sun Pharma's position in the oncology-dermatology market. Dilip Shanghvi, Chairman & Managing Director of Sun Pharma, stated that the deal would bolster the company's franchise in this therapeutic area.

Unloxcyt, an FDA-approved PD-L1 therapy for advanced cutaneous squamous cell carcinoma, is the centerpiece of the acquisition. Sun Pharma plans to leverage its global presence to accelerate patient access to the drug.

This move aligns with Sun Pharma's ongoing efforts to expand its specialty business beyond its traditional focus on generics. The company's specialty portfolio now encompasses 26 products across dermatology, ophthalmology, and oncology-dermatology.

Checkpoint Therapeutics' Pipeline and Market Positioning

In addition to Unloxcyt, Checkpoint is developing olafertinib (formerly CK-101), a third-generation EGFR inhibitor targeting EGFR-mutated non-small cell lung cancer. This pipeline asset further enhances the value proposition of the acquisition for Sun Pharma.

Checkpoint had initially positioned Unloxcyt as a lower-cost alternative to existing PD-1/L1 options. However, this strategy faced challenges, mirroring the struggles of other companies attempting to introduce more affordable immunotherapies, such as the now-defunct EQRx.

Industry Context and Recent Sun Pharma Developments

This acquisition follows Sun Pharma's 2023 purchase of Concert Pharmaceuticals for $576 million, which brought the JAK inhibitor Leqselvi into its portfolio. Leqselvi, an alopecia treatment, received FDA approval last year. However, its launch is currently delayed due to an ongoing patent dispute with rival JAK drug developer Incyte.

The pharmaceutical landscape continues to evolve, with companies like Sun Pharma strategically expanding their specialty portfolios through acquisitions. This trend reflects the industry's focus on high-value, innovative therapies in areas of significant unmet medical need.