Cyclacel and Xcyte Therapies Combine to Form International Biopharmaceutical Company
Shame. I'd rather hoped Cyclacel would float on London's AIM.
Guess they figure the next round of cash will be easier to raise in the US (if only to pay their Sarbanes Oxley costs next year...)
DUNDEE, Scotland & SEATTLE--(BUSINESS WIRE)--Dec. 15, 2005--Cyclacel Group plc (Cyclacel), a privately held corporation, and Xcyte Therapies, Inc. (Xcyte) (Nasdaq:XCYT -News; Nasdaq:XCYTP - News) announced today that they have entered into a definitive agreement to combine the two companies. The transaction will create a publicly-traded international biopharmaceutical company with two clinical stage, mechanism-targeted, small molecule drug candidates in cancer, a third candidate expected to enter clinical trials in the second half of 2006 and a strong development pipeline.
Source: Xcyte Therapies
The transaction is structured as an acquisition by Xcyte of all of the capital stock of Cyclacel Limited, a wholly-owned subsidiary of Cyclacel Group plc. The transaction is anticipated to close at the end of the first quarter of 2006 and is subject to satisfaction of certain customary closing conditions, including the approval of the shareholders of Cyclacel and Xcyte.
The new company, to be called Cyclacel Pharmaceuticals, Inc. (CPI), intends to build upon what it believes to be Cyclacel's leading position in the area of cell cycle biology, with a portfolio of three orally-available, mechanism-targeted drugs that modulate the cancer cell cycle. Cyclacel's drug pipeline includes seliciclib (CYC202), a cyclin dependent kinase (CDK) inhibitor in Phase II clinical trials for the treatment of non-small cell lung cancer; sapacitabine (CYC682), a nucleoside analog in Phase I trials; CYC116, an Aurora kinase inhibitor in IND-directed preclinical development; and early stage programs targeting important cell cycle mechanisms for the treatment of cancer, type 2 diabetes, inflammatory kidney diseases and viral infections.
Potential Milestones for 2006 for CPI include:
Initiation of a multicenter Phase IIb randomized clinical trial of seliciclib (CYC202) in the United States for the treatment of patients with advanced non-small cell lung cancer, expected in the first half of 2006.
Initiation of a Phase Ib clinical trial of sapacitabine (CYC682) at a leading U.S. cancer center in patients with advanced leukemias and myelodysplastic syndrome, expected in the first half of 2006.
Filing of an Investigational New Drug application with FDA to begin Phase I clinical trials with CYC116, an Aurora kinase inhibitor, expected in the second half of 2006.
Sir John Banham, Chairman of Cyclacel, stated, "The transaction will create an international public company with approximately $30 million in cash, a franchise in one of the most exciting fields of biology and a development-stage portfolio of targeted oncology drug candidates affecting the cancer cell cycle. We believe that cell cycle targeted drugs will become increasingly important in the modern treatment of cancer as a chronic disease. Cyclacel is well positioned to benefit from the increasing adoption of orally-active therapeutics for the long-term management of cancer patients. Our drug discovery capabilities are complemented by research into cancer disease pathways in the laboratories of our founding scientists Professors David Lane and David Glover. Our combined insights into cancer biology have resulted in innovative biomarker technology that may help us identify subgroups of patients that are more likely to benefit from our treatments."
Christopher Henney, PhD, Chairman of Xcyte, stated, "We are enthusiastic about the combination with Cyclacel because we believe that the strength and competitive position of the new company offer our shareholders the opportunity to participate in the development and exploitation of a portfolio of product candidates with significant market potential. When we announced earlier this year our intention to pursue strategic alternatives, this was the type of transaction we hoped to be able to offer our shareholders. We have been impressed by the quality and promise of Cyclacel's people and programs and I look forward to participating in the company's progress as a member of the board of directors."
Transaction Details
The terms of the agreement provide for Xcyte to issue shares of its common stock to Cyclacel shareholders. Following closing, Cyclacel shareholders will own approximately 80 percent of the common stock of the combined company and Xcyte shareholders 20 percent, based on issued and outstanding common stock at the date of completion. The stock purchase agreement has been approved by both boards of directors and will need to be approved by the companies' shareholders.
CPI will be headquartered in Short Hills, New Jersey and will maintain its research laboratories in Dundee, Scotland and Cambridge, England. The new company will be led by Spiro Rombotis, Cyclacel's current Chief Executive Officer. In addition, Paul McBarron, Cyclacel's current Chief Financial Officer, will become CPI's Chief Operating Officer. The combined company's board of directors will consist of five Cyclacel directors and one Xcyte director with a seventh director to be appointed after closing. CPI will not retain any operations at Xcyte's facilities in Seattle, Washington.
Upon closing of the transaction, CPI's common stock is expected to trade on the Nasdaq National Market on which the company has reserved the symbol "CYCC". Xcyte's current ticker symbol "XCYT" will become inactive after closing. SG Cowen & Company, LLC served as financial advisor and Wilson Sonsini Goodrich & Rosati, Professional Corporation, as legal advisor to Xcyte. Allen & Overy LLP served as legal advisor to Cyclacel.
Additional Information
In connection with the proposed transaction, Xcyte will file an S-4 registration statement that contains a proxy statement/prospectus with the Securities and Exchange Commission. Xcyte today separately announced an agreement to sell its T cell expansion technology to Invitrogen Corporation. Xcyte will include in its proxy statement a resolution for stockholder approval of the sale of its T cell expansion technology to Invitrogen Corporation. SHAREHOLDERS OF XCYTE AND OTHER INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS TO THE PROXY STATEMENT/PROSPECTUS) REGARDING THE PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Xcyte's shareholders will be able to obtain a free copy of the proxy statement/prospectus, as well as other filings containing information about Xcyte and Cyclacel, without charge, at the SEC's Internet site (http://www.sec.gov). Copies of the proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the proxy statement/prospectus can also be obtained, without charge, by directing a request to Xcyte Therapies, Inc., 1124 Columbia Street, Suite 130, Seattle, WA 98104 Seattle, WA, Attention: Investor Relations, Telephone: 206-262-6200. |
