At least one large shareholder agrees the CRXA deal stinks:
Major Shareholder Intends to Vote Against GlaxoSmithKline Bid to Acquire Corixa for $4.40 Per Share; MPM BioEquities Adviser, LLC Believes Deal Undervalues Corixa by 32%
June 15, 2005 09:15:02 (ET)
SOUTH SAN FRANCISCO, Calif., Jun 15, 2005 (BUSINESS WIRE) -- MPM BioEquities Adviser, LLC announced today that it is voting its 1.1 million shares against the proposed acquisition of Corixa (CRXA, Trade) by GlaxoSmithKline (GSK) (GSK, Trade). MPM has communicated to Corixa its belief that Corixa shareholders are not receiving a fair value from the proposed acquisition. The proxy vote on the merger proposal is set for July 12, 2005.
MPM's own analysis of the acquisition value of Corixa to GSK provides a fair and reasonable value of approximately $6.50. In accepting a significantly lower price, MPM believes that Corixa's Board of Directors has not fully appreciated either the value of the MPL adjuvant program or the novel TLR4 program.
Corixa receives a significant manufacturing fee and royalty from GSK on vaccines produced with the MPL adjuvant, including Simplirix, Fendrix and Cervarix. A recent study published in The Lancet reported Cervarix was the first vaccine to be 100 percent effective in protecting women against two strains of HPV that are linked to more than 70 percent of all cases of cervical cancer. This data strengthened MPM's belief that Cervarix alone will be a multi-billion dollar product, an estimate echoed by several Wall Street analysts. As noted in the recent merger proxy, GSK recently asked for even greater supply than originally projected from Corixa's Montana manufacturing plant and considers this plant and product capacity to be a key asset.
MPM also believes the value of Corixa's TLR4 programs has not been properly considered. For comparison, Anadys recently licensed an early-stage TLR7 program to Novartis for up to $570 million. The agreed upon merger price does not reflect the value Corixa might expect were it to out-license one or more of its novel compounds.
"We believe that Corixa's MPL and TLR programs offer substantial value to shareholders and that this value has not been adequately reflected in the proposed offer," commented Kurt von Emster, General Partner of the MPM BioEquities Fund. "We are disappointed that the Corixa Board is supportive of a low acquisition price just as GlaxoSmithKline has accelerated development of Cervarix, increasing expectations that this will be a blockbuster product."
MPM is seeking a meeting with the Board to review its concerns. |
