Paratek buys Optinose and Xhance spray in $330M deal

In a strategic effort to diversify its healthcare offerings, Paratek Pharmaceuticals has acquired Optinose, along with its chronic rhinosinusitis (CRS) nasal spray, Xhance, in a deal potentially worth up to $330 million. This acquisition was largely propelled by a recent expansion in the approved use of Xhance. Initially sanctioned by the FDA in 2017 for patients suffering from CRS with nasal polyps, the spray has now been approved for use by individuals who do not have nasal polyps. This significant regulatory development has considerably broadened the potential patient base for Xhance, increasing it tenfold to approximately 10 million people. Paratek highlights that Xhance currently stands as the sole CRS treatment available for individuals with and without nasal polyps.

Optinose, originally established in Norway in 2000 and now operating out of Yardley, Pennsylvania, has been promoting Xhance primarily to specialists in ear, nose, and throat medicine. However, the expanded usage approval now positions Xhance advantageously for distribution through primary care providers. These providers are already acquainted with Paratek's antibiotic product, Nuzyra, as emphasized by Paratek's CEO, Evan Loh, M.D. Loh stated, "The majority of the primary care physicians Paratek engages with for Nuzyra's approved indications are also managing patients with CRS, giving us a strategic overlap in our sales efforts." He added that this acquisition enhances Paratek's platform for future product acquisitions, leveraging existing capabilities to further extend their portfolio.

Under the terms of the agreement, Paratek is set to pay $9 per share upfront, which represents a 50% premium over Optinose’s share price at the close of the trading session on Wednesday. The total value of the deal could rise to $14 per share, contingent on future revenue milestones being met. Optinose’s CEO, Ramy Mahmoud, M.D., expressed enthusiasm about the acquisition, noting that Paratek's strong commercial and medical prowess could swiftly boost awareness of Xhance among primary care physicians who handle the bulk of CRS patients. Mahmoud remarked, "We are excited about the many ways this transaction creates opportunities for Xhance to help more patients achieve better symptom control while generating near- and long-term value for Optinose’s shareholders."

In recent years, Paratek has been active in mergers and acquisitions, having been acquired in 2023 by Novo Holdings and the healthcare investment firm Gurnet Point for up to $462 million. This previous deal also included contingent value rights tied to hitting sales targets for Nuzyra by 2026. Gurnet Point was co-founded by the current CEO of Biogen and former chief of Sanofi, Christopher Viehbacher.

Nuzyra, Paratek’s antibiotic, received FDA approval in 2018 and achieved sales of $137 million in 2022. At the time of its approval, analysts from Leerink projected that Nuzyra had the potential to reach peak sales exceeding $500 million. The acquisition of Xhance is expected to further strengthen Paratek's market position by tapping into a wider patient demographic and enhancing its commercial presence through primary care channels.