Cypress Bioscience, After Months of Give and Take, Agrees to a $255M Buyout

After months of rejected offers and dueling media statements, Cypress Bioscience (NASDAQ: [[ticker:CYPB]]) says today it has agreed to a buyout-and-merger deal that will combine the San Diego drug development company with Royalty Pharma, a New York firm that holds a revenue-generating portfolio of drug royalty interests.

Ramius V&O Acquisition, an affiliate of the $7.8 billion Ramius hedge fund group, upped its offer to acquire all outstanding shares of Cypress that it does not already own for $6.50 a share—or about $255 million on a fully diluted basis. The sweetened price represented an 8.3 percent increase over its previous offer, and was unanimously approved by the Cypress board, according to a statement.

The offer that Cypress finally accepted was about 63 percent higher than the original unsolicited buyout proposal at $4 a share that Ramius made in mid-July, and about 160 percent higher than the Cypress’ share price on July 16, the last trading day before the Ramius offer was publicly disclosed.

“Royalty Pharma has proven to be an extremely valuable partner in our acquisition of Cypress,” Ramius Partner and Managing Director Jeffrey Smith says in the statement. “Their expertise in investing in and acquiring royalty interests has allowed us to structure a unique and efficient transaction that we believe clearly maximizes value for all stockholders.”

“We are excited to add the Savella royalty to our diversified portfolio of leading biopharmaceutical royalties and look forward to working with

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.