scPharmaceuticals Tender and CVR Offer
October 7, 2025 - The acquisition was structured as a tender offer to acquire all of the outstanding shares of scPharmaceuticals common stock at a price of $5.35 per share in cash plus one non-tradable contingent value right (CVR) per share to receive certain milestone payments of up to an aggregate of $1.00 per CVR in cash, for total consideration of up to $6.35 per share in cash. The non-tradable CVR is payable upon achieving certain regulatory and net sales milestones.
Source: Company Press Release.
Linked here.
Per the filing provided by the company, terms are as follows. Prospectus linked here.
A holder who surrenders their shares of scPharmaceuticals common stock for cash and CVR shares should report the combination offer as fully taxable.
Cost Basis is typically realized against the value of cash received plus the value of the new stock received. The stock value is determined by multiplying the Fair Market Value by the shares received.
Pro-Tip: CVR pricing can be complex and should be evaluated by a qualified CPA or Tax Attorney.
Tax Consequences to U.S. Holders.
An exchange of Company Shares pursuant to the Offer or the Merger will be a taxable transaction for U.S. federal income tax purposes.
The amount of gain or loss a U.S. Holder recognizes, and the timing and potentially the character of a portion of such gain or loss, depends in part on the U.S. federal income tax treatment of the CVRs, which is subject to some uncertainty. The receipt of the CVRs pursuant to the Offer or the Merger should be treated as either a “closed transaction” or as an “open transaction” for U.S. federal income tax purposes, each as discussed in more detail below. The installment method of reporting will not be available with respect to any gain attributable to the receipt of, or payments on, the CVRs because the Company Shares are traded on an established securities market.
There is no legal authority expressly addressing whether contingent payment rights with characteristics similar to the rights under the CVRs should be treated as open transactions or closed transactions, and this determination is inherently factual in nature. Treasury regulations state that only in “rare and extraordinary” cases would the value of contingent payment obligations not be reasonably ascertainable and, therefore, be subject to the open transaction method. Under U.S. Treasury regulations addressing contingent payment obligations analogous to the CVRs, if the fair market value of the CVRs is reasonably ascertainable, a U.S. Holder should treat the transaction as a closed transaction and include the fair market value of the CVRs as additional consideration received in the Offer or the Merger for purposes of determining gain or loss. U.S. Holders are urged to consult their own tax advisors regarding the proper method of tax accounting with respect to the CVR and Milestone Payments thereunder, including as to whether to apply, and how to report their income under, the closed transaction method or open transaction method, as applicable in their respective case.
