Assertio Therapeutics Inc. and Zyla Life Sciences entered into an all-stock merger agreement to form a company focused on neurology, inflammation and non-opioid pain products.

The merged entity will retain Lake Forest, Ill.-based Assertio's name and trade on Nasdaq under the ASRT ticker symbol.

Assertio said the combined company has pro forma 2019 net product sales of about $128 million and is expected to have product portfolio synergies of over $40 million.

Under the deal, Zyla stockholders will receive 2.5 common shares of the combined company for each common share of Zyla held.

The boards of both companies have approved the merger, which is expected to close in the second quarter, subject to stockholder approval and customary closing conditions.

As part of the merger, Wayne, Pa.-based Zyla will repay its promissory note in full plus the outstanding balance under its $20 million credit facility. The new company will assume only the $95 million principal amount of Zyla's outstanding senior debt.

Zyla President and CEO Todd Smith will assume the role of President and CEO of the combined company while Assertio President and CEO Arthur Higgins will become nonexecutive chairman of the board.

Stifel is acting as exclusive financial adviser to Assertio, while Gibson Dunn & Crutcher LLP is serving as legal counsel. MTS is exclusive financial adviser to Zyla, with Dechert LLP as legal counsel.