Zydus Lifesciences shares jump 5%: From buyback date to acquisition deal; everything investors should know

Zydus Lifesciences shares rallied over 5% on Thursday, May 14, touching an intraday high of ₹987.50 apiece following multiple updates from the company.

At 11 AM, the stock was trading at ₹985.70 apiece on the National Stock Exchange, gaining 4.95%.

Shares of the pharma firm have surged 5% over a month, while they have climbed 4% in the past six months. From the beginning of the year, shares of Zydus Lifesciences have soared 8%.

The company has a total market capitalisation of ₹99,038.58 crore, according to data from the NSE.

Buyback plans

The pharmaceutical company, in a regulatory filing, said that its board of directors will be meeting next week on May 19 to consider the proposal of buyback.

“…please note that the Board of the Company, at its aforesaid meeting, will also consider the proposal for buyback of fully paid-up equity shares of the Company and the matters necessary and incidental thereto, in accordance with the applicable provisions under the Companies Act, 2013,” Zydus Lifesciences said in a statement.

Acquiring Assertio in a $166 million deal

Apart from the buyback, the firm also said it will acquire Nasdaq-listed Assertio Holdings for a total consideration of $166.4 million (approximately ₹1,590 crore).

Zydus Lifesciences, in a separate filing, said that its subsidiary, Zydus Worldwide DMCC, has entered into a definitive agreement to acquire Asserto Holdings, Inc. through its wholly owned acquisition subsidiary, Zara Merger Sub Inc.

The company added that the acquisition will be carried out at a cash consideration of $23.50 per share, with the total deal valued at approximately $166.4 million on a fully diluted basis, calculated using the treasury stock method.

Commenting on the development, Dr Sharvil P. Patel, Managing Director, Zydus Lifesciences Limited, said, “This transaction represents a strategic step in strengthening our speciality and oncology footprint in the US. Assertio brings a focused commercial platform and an approved oncology asset that aligns well with our long-term strategy of building differentiated, durable speciality businesses globally.”

This transaction has been approved by the boards of directors of both Zydus Worldwide and Assertio, and it is structured as a tender offer to be followed by a merger, subject to customary closing conditions and regulatory approvals.

The tender offer is expected to commence within five business days, following the date of the merger agreement, Zydus said. Further, the acquisition is expected to be completed in the financial year 2026-27, subject to customary conditions.

The deal will start with a tender offer, followed by a merger, and it needs to meet standard conditions, including getting enough shares from Assertio's common stock, the statement said.

After the successful completion of the tender offer, Zydus will acquire all remaining shares not tendered in the tender offer through a second-step merger at the same price paid in the tender offer, it added.

Zydus Lifesciences said that the acquisition will provide it with an established US speciality oncology commercial platform, supported by Assertio’s presence in oncology supportive care.

The company noted that Assertio, which is listed on Nasdaq, has a product called ROLVEDON (eflapegrastim-xnst) that the USFDA has approved as a long-lasting treatment to help prevent febrile neutropenia in adult cancer patients receiving chemotherapy that affects bone marrow.

GST penalty appeal rejected

In another separate filing on May 13, Zydus Lifesciences said that it had filed an appeal against a ₹1 crore GST penalty, and the Appellate Authority, Central Goods and Services Tax Appeals Commissionerate, Chandigarh, has upheld the demand, with the penalty amount remaining unchanged.

The pharma company said that the appeal order passed under Section 107 of the CGST Act, 2017, pertains to a demand of ₹17 lakh and a penalty of ₹1.01 crore for the period from July 2017 to March 2021.

Zydus said it intends to file a second appeal against the appeal order before the GST Appellate Tribunal (GSTAT). It added that there is no material financial impact on the company.