>>Peptech primes itself for trade sale<<
Didn't happen.
I missed this 'merger' back in May. Since then, their first (anti TNF) DAB started clinical trials. Directors bought a few shares last week, and I did the same this week...
PEPTECH AND EVOGENIX MERGE TO FORM ANTIBODY POWERHOUSE
Key points:
* A globally-significant player in the fast-growing antibody therapeutics
sector
* High achieving management team driving company growth
* Cash reserves support rapid development of combined product pipeline
Deal terms:
• Peptech offers 15 cents cash plus 0.5055 PTD share for each EGX share
• Implies $1.12 price based on Friday 4 May closing price
• Directors of EvoGenix unanimously recommend the offer
Peptech Limited, (LSE: PTDx, ASX: PTD) 'Peptech' or the 'Company', the
Australian biopharmaceutical company focussed on the development of antibody and
peptide products for the treatment of inflammatory dieses and cancer, today
announced plans to merge, to form one of Australia's largest biotechnology
companies and a company poised to become a high profile player in the world wide
antibody and protein therapeutics sector. The merger represents a major
milestone for both companies and a key landmark for the Australian biotechnology
industry in developing a world class company of scale.
The vision for the new company will entail a demonstrable pathway for rapid
growth, as the high potential antibody products in the combined pipeline
progress through successful testing in patients. The focus of the company is on
developing significant antibody/protein based franchises for the treatment of
inflammatory diseases, bone disease and cancer. Each of these therapeutic areas
represent substantial opportunities with successful antibody based products
achieving record sales growth in recent years to levels in excess of a billion
dollars annually.
The merged company will be led by Peptech CEO, Dr John Chiplin, and a board made
up of directors from both companies. A combined management team with a strong
record of achievement in the sector will drive the future growth of the company.
Dr Merilyn Sleigh, EvoGenix CEO, will be retained in a senior advisory role. The
combined company will be renamed.
The merged entity will have an exceptionally strong balance sheet. Peptech has
substantial cash to fast track product development, having earlier this year
received more than $150 (US$130) million from the sale of its share in UK
company Domantis Limited to GlaxoSmithKline. In addition the combined company
receives on-going revenue streams from Abbott and Johnson & Johnson in relation
to blockbuster antibody, anti-TNF drugs Humira(R) and Remicade(R). Peptech's own
'next generation' anti-TNF drug will enter the clinic this month.
Consistent with the recently announced set of strategic options facing the
company, the Peptech Board is confident that this transaction will add
significantly to shareholder value.
Dr John Chiplin, CEO of Peptech, commented: 'Consistent with our previously
announced strategy, this transaction creates a combined entity which is poised
to be a major player on the world-wide antibody stage. We have genuinely built
critical mass in this Australian merger to compete aggressively in the fastest
growing sector of the international human therapeutic market.' He further noted,
'EvoGenix and Peptech are an excellent strategic fit at all levels. EvoGenix has
revenue-generating technology with proven capabilities and linkages that blend
ideally with our own product development activities, to deliver more rapid
company growth and delivery of products to the clinic.'
EvoGenix's CEO, Dr Merilyn Sleigh, stated: 'We believe that this merger will be
a truly transforming transaction for both companies. The products, technology
and capital assets of the new company, will be combined with strong capabilities
and critical mass across all levels of its operation. This is a unique
opportunity for EvoGenix to step up to the next stage of its development,
continuing its rapid growth profile but within a larger group with complementary
skills and assets.'
The transaction in detail:
The acquisition is to be implemented through a scheme of arrangement between
EvoGenix and its shareholders (Scheme). Peptech will acquire 100% of the issued
shares in EvoGenix for cash and shares totaling $1.12 per share, based on the
closing price of Peptech on Friday 4 May. Under terms of the Merger
Implementation Agreement (MIA), Peptech will offer 15 cents cash plus 0.5055
Peptech shares for each EvoGenix share on issue. This values EvoGenix at
approximately $156 million and represents a 33% premium to EvoGenix's last
traded price on the ASX on 4 May, 2007 of 84.5 cents and a 39% premium to its 30
day volume average weighted price.
Dr John Chiplin will be the CEO and Mel Bridges will be Chairman of the merged
entity. EvoGenix's Chairman, Chris Harris, and a non-executive director, Robin
Beaumont, will join a restructured Peptech board on completion of the proposed
transaction. The management and scientific staff of EvoGenix will continue
within the merged company, with current CEO, Dr Merilyn Sleigh, being retained
in an advisory role.
The merger is subject to EvoGenix shareholder approval and a review by an
independent expert. The EvoGenix Board of Directors unanimously recommend
shareholders accept and vote in favour of the Scheme and confirm it is in the
interest of EvoGenix shareholders in the absence of a superior offer. In
addition the directors of EvoGenix intend to vote all of the shares they hold
directly in favour of the Share Scheme.
Start-up Australia Ventures Pty Limited (SUAV), which holds 30.5% of EvoGenix
shares, has committed to voting 19.9% of EvoGenix shares in favour of the Scheme
through a voting agreement with Peptech, in the absence of a proposal valuing
the company in excess of 115% of the consideration payable by Peptech. 19.9% is
the maximum number of shares Peptech is allowed by law to control at this time.
SUAV was the founding investor in EvoGenix in 2001, when the company was formed
to develop technology derived from the Cooperative Research Centre for
Diagnostics, and CSIRO.
Peptech and EvoGenix have entered into an MIA which provides the framework for
implementing the proposed Share Scheme. The key terms and conditions of the MIA
are summarised in the Appendix.
Timing:
An Explanatory Booklet with full details of the proposed transactions, including
an Independent Expert's Report, is expected to be dispatched to EvoGenix
shareholders in June 2007. The meeting to approve the Scheme is expected to be
held in August.
A more detailed timetable for the approval and implementation of the proposed
transaction will be announced in due course.
Background to the merger:
Peptech was formed in 1985 and listed on the ASX in 1986. Peptech has a proven
track record in commercialising its assets, realising over $300 million in
revenues over the last six years. It has substantial on-going revenue streams
from its licensing agreements with Abbott and Centocor, a subsidiary of Johnson
& Johnson. It is dedicated to developing and providing antibody and
peptide-based human therapeutic products for the treatment of cancer and
inflammatory diseases. It is transitioning to a mid-stage development company as
several of its products move from preclinical development into human trials,
starting with the Company's lead product, PN0621, a differentiated anti-TNF
compound based on a domain antibody. In addition to its ASX listing Peptech is
listed on AIM (PTDx). Peptech recently announced a substantial ($6.6 million)
grant from the Australian government under the government's Pharmaceuticals
Partnerships Program to be used towards the R & D costs that will be incurred
over the next two years. More information on the company is available at
www.peptech.com.
EvoGenix was formed in 2001, acquired US company Absalus Inc in 2005 and listed
on the ASX in the same year. EvoGenix has operations in Australia and the USA,
and focuses on developing antibody therapeutics. Through the 2005 acquisition,
it consolidated a powerful technology platform for converting research stage
antibodies into products suitable for human testing. Based on its technology
capabilities it has established collaborations with GlaxoSmithKline, CSL and
Australian company Vegenics. These agreements generate immediate revenues and a
long-term interest in products being developed through milestone and royalty
payments. GSK recently confirmed successful delivery on the first project
carried out by EvoGenix under their collaboration agreement. EvoGenix has also
used its technology strengths to access and develop a number of internally-owned
products in the areas of cancer, bone loss and respiratory infection. Its
general intention is to out-license these products at an early stage to meet
strategic opportunities in the sector, with selected products advanced
internally through clinical testing. The first such product is due to commence
development for the clinic at the end of 2007. More information on the company
is available at www.evogenix.com.
Merged company
A focus on the antibody sector positions the new company in what is currently
the most dynamic area of the pharmaceutical industry. Antibodies have already
proved their value in opening up entirely new avenues for treatment in cancer
and inflammatory diseases like arthritis. Many antibody products reaching the
market have gone on to achieve blockbuster status - sales of greater than US$1
billion annually. More than 50% of the growth in all drug sales over the next 5
years is expected to come from new and existing antibody products. Antibodies
have finally delivered on their promise as 'magic bullets' and the new company
is poised to be an international leader in the field.
Peptech's lead compound, PN0621, is expected to commence clinical testing in
this quarter, with a further two products from the EvoGenix pipeline ready for
clinical development next year. With these key projects progressing through
clinical development, a continuation of the EvoGenix technology collaboration
strategy and a portfolio of emerging products, the new company has an
outstanding platform from which to deliver increasing shareholder value in the
short and long term..... |
