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Acerus Announces Definitive Agreement to Acquire Serenity LLC and the Global Rights to Noctiva™


Creating a Leading Urology & Men’s Health Pharmaceutical Company

  • Acerus to have access to two significant and growing addressable markets that represent more than 40 million people in the United States alone
  • On a combined pro- forma basis, Acerus is projected to achieve peak net revenue of more than $500 million USD in 2030
  • Acerus acquires Serenity’s future pipeline portfolio

TORONTO, Feb. 28, 2022 (GLOBE NEWSWIRE) -- Acerus Pharmaceuticals Corporation (the “Company” or “Acerus”) (TSX:ASP; OTCQB:ASPCF) today announced that it has entered into a definitive agreement (the “Definitive Agreement”) to indirectly acquire Serenity LLC (“Serenity”) and the global rights to its Noctiva brand in a combined cash and stock transaction. Serenity, based in Miami, FL, is a specialty pharmaceutical company, focused on developing therapies for diseases associated with voiding disorders, and had previously been granted approval by the U.S. Food and Drug Administration (FDA) for its Noctiva (desmopressin acetate) nasal spray. Noctiva is indicated for the treatment of nocturia due to nocturnal polyuria in adults who awaken at least two times per night to void.1 It is the first FDA-approved therapy for nocturia.

Transaction Details

Within 90 days of the effectiveness of the acquisition (the “Acquisition”), Acerus will pay a $6 million USD up-front fee to Serenity, less certain deductions allowed by the Definitive Agreement. Serenity stockholders will be entitled to receive approximately 804 million common shares (“Common Shares”) of Acerus, payable on the earlier of January 10, 2023, if first commercial sale has occurred before then, or the date of the first commercial sale of Noctiva™ (the “First Commercial Sale Shares”), resulting in Serenity stockholders owning approximately 32.6% of the fully diluted Common Shares as calculated as of closing and without taking into account any future financing or other share issuances.

Two additional one-time equity-based sales milestones valued at $5 million USD each, will be paid to Serenity stockholders when aggregate Net Sales of Noctiva™ sold in the United States and Canada combined, first reach the respective thresholds of $100 million and $150 million USD in annual net sales. These equity milestones will be paid in Common Shares and will be valued at the highest of the then current market price or a pre-determined floor price (the “Sales Milestone Shares”).

Serenity stockholders will also receive tiered low double-digit Contingent Sales Payments, paid in cash, equal to a percentage of Net Sales of Noctiva™ sold in the United States and Canada during each calendar year. Serenity stockholders will also receive Contingent Sales Payments, paid in cash, equal to a percentage of Net Royalty Profits of Noctiva™ sold outside of the United States and Canada during each calendar year.

The boards of directors of both companies have approved the transaction.

Strategic Rationale and Financial Benefits of the Transaction

The combined company will have a significantly increased presence in the prescription urology and men’s health markets. Acerus’ portfolio will include two FDA-approved products, Noctiva and Natesto®, that address large patient populations as well as a pipeline of future opportunities related to Noctiva. There is significant commercial and operational synergy between the two products. The combined products leverage similar physician call points – primarily urologists and primary care physicians, retail pharmacy distribution and commercial and government payors. As a result, Acerus management feels that there will be a significant opportunity to scale its existing commercial infrastructure to drive growth in the combined portfolio.

An estimated 40 million Americans experience nocturia (the need to urinate 2 or more times per night) and approximately 3 million of these people are under a physician’s care and currently receiving pharmaceutical treatment for their nocturia2,3. Over 8 million prescriptions were written in 2021 in the United States alone for testosterone replacement therapy4. Both Noctiva and Natesto® are highly clinically differentiated products with significant patent protection into the 2030s, that Acerus management feels could reach double-digit market share in each of these large market opportunities. On a combined pro- forma basis, Acerus’ management believes that the combined company could achieve peak net revenue of more than $500 million USD in 2030, representing approximately 84,000 patients on Natesto and 319,000 patients on Noctiva.1  

In order to fund the up-front fee, required sales force expansion, marketing investment (including direct to consumer), growth of the existing Natesto business, and resumption of Noctiva™ production (which is currently expected to be completed by the fourth quarter of 2022), Acerus expects to have to raise an estimated $60 million USD in additional capital over the next two years.

“This is a truly transformative transaction, elevating Acerus into a leading specialty pharmaceutical company positioned for what we expect to be an accelerated path to profitability, continued revenue growth and further business diversification,” said Edward Gudaitis, President and Chief Executive Officer of Acerus Pharmaceuticals. “The combination of Serenity with the Acerus business further increases our footprint in attractive urology and men’s health market segments. This transaction is an excellent strategic fit with our market expansion plans and we believe the Acquisition will create significant stockholder value.”

Mr. Gudaitis continued, “This transaction gives Acerus access to two significant addressable markets, adding the large and unmet nocturia market opportunity on top of the large testosterone replacement opportunity. Importantly, and despite the impact of COVID-19, Acerus has built a robust commercial organization in the United States that has driven Natesto® total prescription growth of over 30% year over year in the third quarter of 2021. Expanding into nocturia with Serenity is the ideal embodiment of Acerus’ strategy to build a portfolio of best-in-class prescription therapeutics that can leverage our company capabilities to compete in the large and growing urology and men’s health markets.”

Dr. Samuel Herschkowitz, the present Chief Executive Officer of Serenity states: “An estimated 40 million men and women suffer from frequent nighttime urination. This condition, called nocturia, is associated with many co-morbid conditions1 that can adversely affect daily functioning and the quality of life of the patient. Noctiva is able to effectively treat this chronic voiding disorder, which disproportionately affects older patients, provide for better sleep and improve the quality of life for patients with nocturia. Natesto and Noctiva are complementary drug products, which will provide Acerus with commercial synergy, while helping millions of patients. We look forward to building both these product lines to address these vital medical needs.”

This section and this press release contain forward-looking information. Please see notice regarding forward-looking statements below. These statements are subject to certain key expectations and assumptions and are subject to various risks and uncertainties which could cause actual results to differ materially from the anticipated results or expectations expressed in this press release.

Additional Information

The combined company will continue to be led by Edward Gudaitis, President and Chief Executive Officer of Acerus and will be headquartered in Mississauga, Ontario. The board of the combined company will consist of six members designated by Acerus and one member designated by Serenity, including Serenity Chief Executive Officer and Director Dr. Samuel Herschkowitz (who will assume the role of Vice-Chair) and Serenity Chief Medical Officer and Director Dr. Seymour Fein (who will assume a Board Observer role).

“We are pleased to welcome Dr. Samuel Herschkowitz to the Acerus Board of Directors and Dr. Seymour Fein as a board observer,” commented Ian Ihnatowycz, Chairman of the Board. “Their knowledge of pharmaceutical product development and commercialization will undoubtedly be beneficial to Acerus.”

The Acquisition is currently expected to close on March 7, 2022, subject to obtaining final TSX approval. Following closing, Acerus will hold an investor call and will make available on its website and on SEDAR an overview presentation of the transaction and the combined company as well as a short FAQ document.

Torreya Capital LLC served as exclusive financial advisor to Acerus and provided a fairness opinion to Acerus’ Board of Directors. Sidley Austin LLP and Stikeman Elliot LLP are acting as Acerus’ legal counsel.   Goodwin Procter LLP is acting as Serenity’s legal counsel.

TSX Shareholder Approval Requirements

Completion of the Acquisition could result in the issuance of up to 1,533,642,008 Common Shares assuming the First Commercial Sale Shares and each tranche of the Sales Milestone Shares become issuable to the Serenity stockholders in accordance with the terms of the Definitive Agreement (and the Sales Milestone Shares are issued at the floor price) representing approximately 99.74% of Acerus’ currently issued and outstanding Common Shares.  Section 611(c) of the TSX Company Manual requires that shareholder approval be obtained where the number of securities issued or issuable in payment of the purchase price for an acquisition exceeds 25% of the number of securities of the listed issuer which are outstanding, on a non-diluted basis.  Pursuant to section 604(d) of the TSX Company Manual, holders of more than 50% of the votes attached to the Common Shares have delivered a written consent to the issuance of the Common Shares that may become issuable in accordance with the terms of the Definitive Agreement, which has been provided to the TSX to satisfy shareholder approval for the potential issuance of the Common Shares to the Serenity stockholders under the Definitive Agreement. 

As of the date hereof, Acerus has 1,537,588,081 Common Shares issued and outstanding on a non-diluted basis.  Serenity has two key securityholders, who Acerus expects will receive approximately 33.35% and 25.94%, respectively, of the Common Shares issuable to Serenity securityholders in connection with the Acquisition.  Assuming the full number of Common Shares issuable under the Definitive Agreement become issuable (which includes issuance of the Sales Milestone Shares at the floor price) and there are no other changes to Acerus’ issued and outstanding Common Shares as of the date hereof, such key securityholders of Serenity would own approximately 16.65% and 12.95% of Acerus’ issued and outstanding Common Shares at such time.  Based on the same assumptions, First Generation Capital Inc., Acerus’ current controlling shareholder, would continue to own approximately 44.8% of Acerus’ issued and outstanding Common Shares at such time. All of the Serenity securityholders are arm’s-length to Acerus and none of Acerus’ directors or officers are insiders of Serenity.

About Acerus

Acerus Pharmaceuticals Corporation is a specialty pharmaceutical company focused on the commercialization and development of innovative prescription products that improve patient experience, with a primary focus in the field of men’s health. The Company commercializes its products via its own salesforce in the United States and Canada, and through a global network of licensed distributors in other territories.

Acerus’ shares trade on TSX under the symbol ASP and on OTCQB under the symbol ASPCF. For more information, visit and follow us on Twitter and LinkedIn.

About Serenity

Founded in 2006 and located in Miami, Florida, Serenity Pharmaceuticals is focused on developing products that address urinary conditions that impact the health and well-being of millions of people. Serenity Pharmaceuticals is working to develop patented pharmaceuticals with unique delivery mechanisms and formulations, to provide safe and effective treatments for voiding disorders.

About NATESTO® (Testosterone) Nasal Gel

Natesto is a nasal gel formulation of testosterone developed by Acerus Pharmaceuticals Corporation and indicated as a replacement therapy for men diagnosed with conditions associated with a deficiency or absence of endogenous testosterone (hypogonadism). It is the first and only nasally administered testosterone product approved by the U.S. Food and Drug Administration, Health Canada and South Korea Ministry of Food and Drug Safety (MFDS), available in a ‘no-touch’ dispenser with a metered dose pump. For further information, specific to the U.S. product dosing and administration, please visit:  

Notice regarding forward-looking statements

Except for statements of historical fact relating to Acerus or Serenity, certain statement contained in this press release constitute forward-looking information, future oriented financial information or financial outlooks (collectively “forward-looking information”) within the meaning of applicable securities laws. Forward-looking information may be contained in this document and other public filings of Acerus. Forward-looking information relates to statements concerning Acerus and the combined company’s outlook, anticipated events or results, statements as to Acerus’ management expectations with respect to the Acquisition, including the completion thereof, and statements with respect to the combined company including expected net revenues of the combined company and in some cases, can be identified by terminology such as “may”, “will”, “could”, “should”, “expect”, “plan”, “forecast”, “anticipate”, “believe”, “intend”, “estimate”, “projects”, “predict”, “potential”, “continue” or other similar expressions concerning matters that are not historical facts.

Forward-looking information in this press release are based on certain key expectations and assumptions made by Acerus, including expectations and assumptions concerning the closing of the Acquisition. Although Acerus believes that the expectations and assumptions on which such forward-looking information are based are reasonable, undue reliance should not be placed on the forward-looking information because Acerus can give no assurance that they will prove correct. Forward-looking information are subject to various risks and uncertainties which could cause actual results and experience to differ materially from the anticipated results or expectations expressed in this press release. The key risks and uncertainties include, but are not limited to, the Acquisition not closing as anticipated; delay or failure to resume the production of Noctiva; failure to raise sufficient capital, which could impede the ability to properly launch Noctiva and thus achieve anticipated revenue targets for Acerus; failure to maintain ongoing production of Natesto or Noctiva due to quality issues, supply chain disruption or events at the contract manufacturers that produce both products; failure to achieve or maintain adequate and competitive commercial and government reimbursement for either of Natesto and Noctiva with key payers in the US or other key markets; failure to attain market acceptance and anticipated market shares for the combined company’s products; failure to retain key personnel or failure to replace departures in a timely manner; failure of the combined company to integrate and achieve expected synergies; the profitability and viability of the combined entity; the ability of Acerus and the combined company to continue as a going concern; the anticipated ability of Acerus to raise the capital required to fund the payment of the purchase price and the operations of the combined company; the continued commercialization and sales of products; market acceptance of the company’s products; generic entrance risk and intellectual property risks; risks associated with the company’s marketing and distribution and reliance on third party manufacturers and suppliers; risks related to product safety or efficacy concerns which could result in litigation, regulatory action or product recalls or withdrawals; governmental and regulatory requirements and actions by governmental authorities, including changes in government policy, tax, prescription drug pricing and rebates and other laws or regulations and interpretations thereof; developments with respect to the COVID-19 pandemic, including the duration, severity and scope of the pandemic and potential impacts on operations and supply chains; the fact that the combined company will continue to have a controlling shareholder; and other risk factors detailed from time to time in Acerus’ reports filed with the Canadian securities regulatory authorities. For more exhaustive information on these risks and uncertainties you should refer to our annual information form dated March 10, 2021, that is available on Forward-looking information contained in this press release is based on our current estimates, expectations and projections, which we believe are reasonable as of the current date. You should not place undue reliance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

Company Contact

Investor Relations Contact
Chris Witty
Acerus Investor Relations
(646) 438-9385        

References :

  1. Noctiva™ U.S. package insert
  2. Leslie SW, Sajjad H, Singh S. Nocturia. [Updated 2021 Aug 12]. In: StatPearls [Internet]. Treasure Island (FL): StatPearls Publishing; 2021 Jan. Available from:
  3. Int Neurourol J. 2016 Dec;20(4):304-310. doi: 10.5213/inj.1632558.279. Epub 2016 Dec 26
  4. Symphony Health prescription data

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Source: Acerus Pharmaceuticals Corporation