How much it's worth is questionable, but they certainly haven't paid much.
Enough of these lottery ticket deals, and they might just pick a winner.
>>...Under the terms of the agreement, Ligand will pay at the closing of the transaction approximately $3.2 million in cash, less Metabasis’ estimated net liabilities at closing (currently estimated to then be over $1.3 million) and less an amount deposited in the stockholders’ representative’s fund. At this time, Metabasis estimates the net cash that will be available for distribution to stockholders of Metabasis at closing will be approximately $1.8 million.
In addition to cash, Metabasis stockholders will receive tradable Contingent Value Rights (one of each series of CVRs (or 4 in total), for each former Metabasis share) that may result in additional cash payments to the CVR holders including the following:
Approximately two-thirds of any milestone payments, royalties or saleback proceeds collected from Metabasis’ partnership with Roche for the development of treatments for hepatitis;
50% of any net proceeds received for licensing or selling Metabasis’ thyroid receptor ß program for hyperlipidemia and/or glucagon program for diabetes for any transaction entered into in the six years following closing, 40% and 30%, respectively, of any proceeds from such a transaction entered into in the seventh and eighth years following closing, and 20% of any proceeds from such a transaction entered into in the ninth and tenth years following closing;
90% of any net proceeds received for licensing or selling Metabasis’ MB07133 program for the treatment of hepatocellular carcinoma for any transaction entered into in the six months following closing, 30% of any proceeds from such a transaction entered into after the sixth month anniversary of closing and before the two year anniversary of closing, and 10% of any proceeds from such a transaction entered into in the third through tenth years following closing;
60% of any net proceeds from any disposition of Metabasis’ equity interest in PeriCor Therapeutics, Inc., which in partnership with Schering-Plough Corporation is in Phase III development of a compound for the prevention of adverse cardiovascular and cerebrovascular outcomes in patients undergoing coronary artery bypass graft surgery;
50% of any net proceeds received for licensing or selling any of Metabasis’ other drug development programs or certain platform technologies for any transaction occurring with respect to any such program before Ligand has made research and development investments in excess of a specified amount on such program, and 25% in the event Ligand’s investments exceed such amount on such program; and
any shortfall in Ligand’s commitment to spend at least $8 million in funding Metabasis programs over 42 months following the close of the transaction.
Aside from what is due to Metabasis’ CVR holders and subject to certain obligations, Ligand will retain all rights and economic interests in the programs and have full control over the development decisions for the pipeline programs. Ligand has agreed to spend a minimum of $7 million on Metabasis programs over the 30 months following closing, unless both the glucagon and TRß programs have failed or a major licensing event has occurred for at least one of those two programs, and to spend a grand total of $8 million within the 42 months following closing.
A Metabasis stockholder representative will monitor compliance with Ligand’s funding obligation and oversee the collection and disbursement of cash to the CVR holders. A rights agent will be retained to collect any cash payments due to the CVR holders and will disburse net proceeds, if any, every six months.
The transaction is expected to close in early 2010 and is subject to approval by Metabasis’ stockholders and other customary closing conditions.
With the acquisition of Metabasis, Ligand does not anticipate any change to its year-end 2009 financial outlook. For 2010, the required cash payment of $3.2 million is projected to be largely offset by the potential receipt of a cash milestone from Roche for the advancement of its program for hepatitis, net of the portion of that payment to be allocated to CVR holders. The obligation for funding Metabasis’ programs is not expected to materially change Ligand’s overall spending over the next several years, as spending for R&D projects can be directed as needed to the highest priority programs...<< |
