aibioFortress Biotech's Checkpoint unit agrees to Sun Pharma deal at $4.10 a share plus CVR
Tickers FBIO
Checkpoint Therapeutics, the majority-controlled unit of Fortress Biotech, agreed to be bought by Sun Pharma for $4.10 in cash per share plus a contingent value right of up to $0.70. Fortress has agreed to vote in favor and will receive a 2.5% royalty.
Key facts
- Company
- Fortress Biotech, Inc. (NASDAQ: FBIO)
- News type
- Mergers
- Primary source
- Fortress Biotech, Inc. 8-K (2025-03-10)
Checkpoint Therapeutics, Inc., a Delaware corporation and majority-controlled subsidiary of Fortress Biotech, Inc. (FBIO), entered into an agreement and plan of merger with Sun Pharmaceutical Industries, Inc. on March 9, 2025. Fortress reported the agreement in an 8-K dated March 9, 2025, filed March 10, 2025, from its Bay Harbor Islands, Florida office. Under the deal, a Sun Pharma subsidiary called Snoopy Merger Sub, Inc. would merge into Checkpoint, which would survive as a wholly owned subsidiary of Sun Pharma.
The consideration
Each share of common stock and Class A common stock of Checkpoint, including unvested restricted shares, would be converted into $4.10 in cash, without interest. Each holder would also receive one non-tradable contingent value right, or CVR, that pays up to $0.70 in cash if specified milestones are met. The CVR payments are staged. They are $0.70 if approval comes early and the approved dosing is once every three weeks, $0.45 for early approval with more frequent dosing, and $0.45 or $0.20 for later approval, depending on dosing.
The milestone is regulatory approval of cosibelimab in the European Union through the centralized procedure, or in Germany, France, Italy, Spain or the United Kingdom. The deadline is 36 months after the European Medicines Agency validates a marketing authorization application for the drug. The 8-K says there can be no assurance the milestone will be reached or any payment made. Sun Pharma must use commercially reasonable efforts to file the application with the EMA within 12 months of closing, or as soon as practicable if the EMA's feedback makes that timing impractical.
Conditions and the vote
Closing requires approval by a majority of the shares held by Checkpoint stockholders other than Fortress and its controlled affiliates, Checkpoint's directors and its officers. It also requires a majority of the outstanding voting power and the end of the Hart-Scott-Rodino waiting period. The 8-K says Fortress owns about 11.2% of the outstanding shares, comprising 6,222,249 common shares and 700,000 Class A shares, and controls a majority of the voting power through its Class A shares.
Fortress has signed a support agreement with Sun Pharma and Checkpoint under which it will vote in favor of the merger, will not transfer its shares, and will waive appraisal rights. It has also agreed to forgo further payments, dividends or share issuances under a founders agreement dated July 11, 2016. Because Fortress controls the majority of voting power and has agreed to vote in favor, the second approval is in practice in its hands.
The outside date is 11:59 p.m. Eastern Time on September 5, 2025. Checkpoint would owe Sun Pharma a termination fee of $12,500,000 in certain cases, including if the board withdraws its recommendation or if Checkpoint leaves to accept a superior proposal, and in some cases where it later completes a rival transaction within one year. The agreement contains no-shop limits on talks with other bidders.
Fortress's other arrangements
The deal comes with a royalty agreement under which Fortress will receive quarterly payments of 2.5% of net sales of certain Checkpoint and Sun Pharma products worldwide. Fortress and Checkpoint will also sign a transition services agreement, under which Fortress would provide services to Checkpoint after the merger for compensation to be set out in that agreement.
The 8-K gives the royalty rate but not the products it covers in detail, the length of the royalty period, or the compensation under the transition agreement. Those terms sit in exhibits the 8-K text does not reproduce.
What the filing leaves out
The 8-K names no financial adviser to Checkpoint or to Fortress and does not mention a fairness opinion. It names no counsel for any party. It gives no premium over a recent share price, and it does not say how the $4.10 cash amount compares with Checkpoint's trading price before the announcement.
The filing lists risks, including uncertainty over the timing of closing, whether Checkpoint's stockholders will approve the deal, the possibility of competing offers and whether governmental approvals will be granted without conditions. Those risks are written as general forward-looking language, and the 8-K gives no dated plan for the EMA filing beyond the 12-month target.