--Strategic Merger Creates Well-Capitalized,
Global Biopharmaceutical Organization with Diverse Portfolio of Two
Commercialized Rare Disease Programs and a Phase 3 Ready
Ultra-Orphan Development Program Addressing Significant Unmet
Medical Need--
Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) (“Aegerion”) and QLT
Inc. (NASDAQ:QLTI) (TSX:QLT) (“QLT”) today announced that they have
entered into a definitive merger agreement under which Aegerion
will be merged with a wholly owned indirect subsidiary of QLT. Upon
completion of the proposed merger, each outstanding share of
Aegerion common stock will be exchanged for 1.0256 shares of QLT
common stock. QLT plans to change its name upon the closing of the
proposed transaction to Novelion Therapeutics Inc. (“Novelion”) and
its common shares will trade on the NASDAQ Global Select Market and
the Toronto Stock Exchange.
A broad-based investor syndicate comprised of both new investors
and existing shareholders of both companies (collectively, the
“Investors”) has committed to invest approximately $22 million in
QLT and to vote in favor of the proposed transaction. This
investment would be funded immediately prior to the transaction
close and is expected to provide Novelion with additional capital
to support future operations and the potential opportunity for
targeted business development initiatives. Assuming completion of
the proposed merger by the end of the third quarter of 2016,
Novelion is expected to have an unrestricted cash balance of over
$100 million.
The proposed transaction, which has been approved by the Boards
of Directors of both companies, is expected to close late in the
third quarter or during the fourth quarter of 2016, subject to
approval by shareholders representing a majority of the outstanding
common stock of each of QLT and Aegerion as well as other closing
conditions.
Strategic Merger Designed to Transform Both Companies
and Create Significant Value for Shareholders
The proposed merger is expected to create a strong, rare
disease-focused global biopharmaceutical company with a diversified
portfolio consisting of Aegerion’s two commercially branded
products, Juxtapid® (lomitapide) capsules and Myalept®
(metreleptin), and QLT’s QLT091001 (“Zuretinol Acetate” or
“Zuretinol”), a Phase 3-ready Ultra-Orphan Fast Track and Orphan
Drug designated asset being developed for the treatment of
Inherited Retinal Disease caused by underlying mutations in RPE65
or LRAT genes (“IRD”), which indication comprises Leber Congenital
Amaurosis (“LCA”) and Retinitis Pigmentosa (“RP”).
Aegerion’s Chief Executive Officer, Mary Szela, who will serve
as Chief Executive Officer of Novelion following the close of the
transaction, said: “We believe QLT’s clinical development team, and
meaningful cash position, and Aegerion’s commercialization
expertise will help unlock significant value in QLT’s Zuretinol
asset and enable Novelion to pursue important milestones across a
commercial and late-stage portfolio, including potential regulatory
approval in Japan for Juxtapid and potential regulatory filings in
Europe for Myalept. I believe that this proposed merger represents
a fresh start and an opportunity to create significant value, and I
look forward to driving our programs forward.”
Dr. Geoffrey F. Cox, Ph.D., QLT’s Interim Chief Executive
Officer, said: “Given the resource requirements for QLT to build
out a global commercial infrastructure designed to most effectively
maximize the value of our promising ultra-orphan Zuretinol asset,
the QLT board determined that it would be advantageous to join
forces with a strategic partner possessing the relevant orphan
product infrastructure. We believe Aegerion and QLT are ideal
complements, and we are confident that this transaction achieves
virtually all of the principal goals and objectives of our
strategic review process. In addition, QLT is expected to benefit
from greater scale and diversification, as well as from a more
liquid stock.”
QLT’s Promising Ultra-Orphan Pipeline Product (Zuretinol
acetate)
QLT is developing a synthetic retinoid product candidate
(Zuretinol acetate) for the potential treatment of Inherited
Retinal Disease caused by underlying mutations in RPE65 or LRAT
genes (IRD) that prevent adequate functioning of the retinoid
cycle, which indication comprises LCA and RP. LCA and RP are two
forms of severe IRD resulting in progressive vision loss starting
in childhood and leading to inevitable blindness.
There are currently no U.S. Food and Drug Administration (“FDA”)
or European Medicines Agency (“EMA”) approved pharmacologic
treatments for either LCA or RP, underscoring the significant unmet
medical need. Zuretinol acetate is expected to advance to Phase 3
clinical trials in the third quarter of 2016 and has Orphan Drug
designation from both FDA and EMA, as well as FDA Fast Track
designation. As an oral product, Zuretinol acetate is being studied
for its potential to treat the retinas of both eyes simultaneously.
If approved, QLT believes it is possible to achieve first-line
positioning in the treatment of IRD.
Private Placement
In combination with the proposed merger transaction, a
broad-based investor syndicate will subscribe to purchase
approximately $22 million in shares of QLT common stock for a
purchase price of $1.76 per share is subject to the satisfaction or
waiver of the conditions to closing the merger. These
commitments would be funded immediately prior to merger
closing to provide Novelion additional capital to support future
operations and the potential opportunity for targeted business
development initiatives.
The investor syndicate includes new investors,
including Deerfield, and a broad group of existing Aegerion
and QLT shareholders, including Armistice Capital, Broadfin
Capital, Healthcare Value Capital, JW Asset Management, K2 &
Associates Investment Management, Sarissa Capital, Tiger Legatus
Capital Management, and others.
The subscription by the Investors to purchase shares of QLT
common stock is subject to the satisfaction or waiver of the
conditions to closing the merger. Each of the Investors has also
agreed to vote its shares in QLT and Aegerion in favor of the
transaction.
Corporate Governance
Following the close of the transaction, Novelion is expected to
have its principal headquarters in Vancouver, British Columbia,
where QLT is currently located, with business operations in
Cambridge, Massachusetts.
The Board of Directors of Novelion will be comprised of ten
members, including four QLT designees, four Aegerion designees and
two shareholder representatives, one from Broadfin Capital and the
other from Sarissa Capital. For a period of time that expires
shortly after Novelion’s 2017 annual shareholder meeting, Sarissa
Capital also has the right to designate an additional director to
the Novelion Board.
Transaction Details
Under the terms of the merger agreement, Aegerion will become a
wholly-owned indirect subsidiary of QLT, and each existing share of
Aegerion common stock will be converted into the right to receive
1.0256 common shares of Novelion. As a result of the structure of
this transaction, a repayment obligation with respect to Aegerion’s
outstanding convertible notes will not be triggered.
The exchange ratio for the transaction is subject to certain
adjustments if Aegerion’s previously disclosed securities class
action litigation and Department of Justice (“DOJ”) and Securities
and Exchange Commission (“SEC”) investigations are resolved prior
to closing for amounts in excess of negotiated thresholds. In the
event the class action litigation or DOJ and SEC investigations are
not settled prior to closing, and in order to mitigate the risk of
certain losses from these outstanding matters after transaction
close, QLT will enter into a warrant agreement pursuant to which
warrants will be issued to QLT shareholders and the Investors that
would be exercisable for additional Novelion shares if the class
action litigation or DOJ and SEC investigations are subsequently
resolved for amounts in excess of negotiated thresholds.
Following completion of the proposed merger, QLT shareholders,
including the Investors, who are investing in QLT immediately prior
to closing, are expected to own approximately 67% and current
Aegerion shareholders will own approximately 33% of Novelion’s
common shares.
Concurrent with signing, Aegerion and QLT have entered into a
loan agreement under which QLT has agreed to loan Aegerion up to
$15 million for working capital. Aegerion will borrow $3 million in
connection with execution of the Merger Agreement and may borrow up
to $3 million per month in subsequent months, subject to certain
conditions, if and to the extent such amounts are necessary in
order for Aegerion to maintain an unrestricted cash balance of $25
million.
In addition to shareholder approval, the merger is subject to
stock exchange approvals and other closing conditions, including,
among others, regulatory approval and completion of a specified
minimum of the private placement in QLT by the Investors.
Greenhill & Co., LLC is acting as the exclusive financial
advisor to QLT and Weil, Gotshal & Manges LLP is serving as
QLT’s legal counsel. J.P. Morgan is acting as the exclusive
financial advisor to Aegerion and Ropes & Gray LLP is serving
as Aegerion’s legal counsel.
Conference Call & Webcast:Aegerion and QLT
will host a conference call and webcast at 8:30 a.m. ET today to
discuss this transaction. The live call may be accessed by phone by
calling (866) 516-3002 (domestic) or (760) 298-5082
(international). The webcast can be accessed on the Investor
Relations sections of the companies’ websites at www.Aegerion.com
and www.QLTinc.com, respectively.
About AegerionAegerion Pharmaceuticals is a
biopharmaceutical company dedicated to the development and
commercialization of innovative therapies for patients with
debilitating rare diseases. For more information about Aegerion,
please visit www.Aegerion.com.
About QLTQLT is a biotechnology company
dedicated to the development and commercialization of innovative
ocular products that address the unmet medical needs of patients
and clinicians worldwide. We are focused on developing our
synthetic retinoid program for the treatment of certain inherited
retinal diseases. For more information about QLT, please visit
www.QLTinc.com.
About Armistice Capital, LLC Armistice Capital,
LLC is a New York based investment manager that specializes in the
health care and consumer sectors.
About Broadfin CapitalBroadfin Capital is an
asset management firm focused on the healthcare sector. Founded in
2005, Broadfin seeks to invest in companies delivering innovative
products and technologies. The firm's objective is to deliver
strong, uncorrelated returns. With a long-term investment horizon,
Broadfin seeks to partner with healthcare companies that are
working to improve patient outcomes and reduce costs.
About DeerfieldDeerfield is an investment
management firm committed to advancing healthcare through
investment, information and philanthropy.
About JW Asset Management, LLCJW Asset
Management, a New York based registered investment adviser, is
active in both public and private equity markets. Jason Wild, a
registered pharmacist, is the firm's Founder and Chief Investment
Officer. JW Asset Management was founded in 2003 and has a strong
history of finding opportunities within the specialty
pharmaceutical sector.
About Healthcare Value Capital, LLCHealthcare
Value Capital, LLC is a New Jersey-based investment advisor founded
in 2008. HVC manages strategies that invest broadly across the
healthcare sector, and across market capitalizations. The fund
is managed by Joseph Riccardo and Thomas DesChamps.
About K2 & Associates Investment Management
Inc.K2 has built a reputation as Canada’s leading
multi-strategy hedge fund firm since its inception in 1998. Its
mainline fund, The K2 Principal Fund, has a net annualized return
upwards of 19%.
About Sarissa Capital Sarissa Capital is an
investment manager that focuses on improving the strategies of
companies to better provide shareholder value.
About Tiger Legatus Capital Management, LLC
Tiger Legatus Asset Management LLC is a Delaware limited liability
company, with its principal office in New York, New York, that
began providing investment advisory services in December 2009.
Additional Information about the Proposed Transaction
and Where to Find It
This communication does not constitute an offer to buy or
solicitation of any offer to sell securities or a solicitation of
any vote or approval. It does not constitute a prospectus and no
offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S.
Securities Act of 1933, as amended. This communication relates to
the proposed business combination between QLT and Aegerion. In
connection with the proposed transaction, QLT will file with the
SEC a registration statement on Form S-4 that will include the
joint proxy statement/circular of Aegerion and QLT that also
includes a prospectus relating to shares of QLT common stock to be
issued in connection with the proposed transaction. Aegerion and
QLT will mail the joint proxy statement/circular to their
respective shareholders in connection with the transaction. This
communication is not a substitute for the registration statement,
joint proxy statement/circular, prospectus or other documents that
QLT and/or Aegerion may file with the SEC in connection with the
proposed transaction. INVESTORS OF QLT AND AEGERION ARE URGED TO
READ THE REGISTRATION STATEMENT, JOINT PROXY STATEMENT/CIRCULAR,
PROSPECTUS AND OTHER DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT QLT, AEGERION AND THE
PROPOSED TRANSACTION. Aegerion shareholders will be able to obtain
the registration statement, joint proxy statement/circular, and
prospectus, as well as other filings containing information about
Aegerion, QLT and the proposed transaction, free of charge, at the
website maintained by the SEC at www.sec.gov and, in QLT’s case,
also on the SEDAR website maintained by the Canadian Securities
Administrators (CSA) at www.sedar.com. Aegerion shareholders may
also obtain these documents, free of charge, from Aegerion’s
website (www.Aegerion.com) under “Investors—Financial
Information—SEC Filings” or by directing a request to Aegerion’s
Secretary at Aegerion Pharmaceuticals, Inc., One Main Street, Suite
800, Cambridge, MA 02142. QLT shareholders may also obtain these
documents, free of charge, from QLT’s website at www.QLTinc.com
under “Investors—Securities Filings—Proxy Circulars” or upon
request directly to QLT to the attention of “QLT Investor
Relations,” 887 Great Northern Way, Suite 250, Vancouver, British
Columbia, Canada, V5T 4T5.
Participants in the Solicitation
The respective directors and executive officers of Aegerion and
QLT and other persons may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information regarding Aegerion’s directors and executive officers
is available or incorporated by reference in its Annual Report on
Form 10-K filed with the SEC on March 15, 2016, and information
regarding QLT directors and executive officers is available in its
Annual Report on Form 10-K filed with the SEC and the CSA on
February 25, 2016, as amended by its Annual Report on Form 10-K/A
filed with the SEC and the CSA on April 29, 2016. These documents
can be obtained free of charge from the sources indicated above.
Other information regarding the interests of the participants in
the proxy solicitation will be included in the registration
statement, joint proxy statement/circular and other relevant
materials to be filed with the SEC and the CSA.
Cautionary Statement Regarding
Forward-Looking Statements
This document contains “forward looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995, as
amended, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and
may be forward-looking information as defined under applicable
Canadian securities legislation (collectively, “forward-looking
statements”). Forward-looking statements contained in this document
may include, without limitation, statements regarding the proposed
transaction between QLT and Aegerion, the timing and financial and
strategic benefits thereof, expected impact of the transaction and
private placement investment on the cash balance of the companies
following the proposed merger, the future strategies, plans and
expectations for the companies, and the anticipated timing of
clinical trials and approvals for, and the commercial potential of,
the companies’ pipeline products. Forward-looking statements are
subject to a number of risks and uncertainties that could cause
actual results to materially differ from those described in the
forward-looking statements, including the failure to receive, on a
timely basis or otherwise, the required approvals by Aegerion and
QLT shareholders and government or regulatory agencies; the risk
that a condition to closing of the merger may not be satisfied; the
possibility that the anticipated benefits and synergies from the
proposed merger cannot be fully realized or may take longer to
realize than expected; the possibility that costs or difficulties
related to the integration of Aegerion and QLT operations will be
greater than expected; the ability of the companies to retain and
hire key personnel and maintain relationships with customers,
suppliers or other business partners; the impact of legislative,
regulatory, competitive and technological changes, including
changes in tax laws or interpretations that could increase the
consolidated tax liabilities of the companies following the
proposed merger; and other risk factors relating to the
biopharmaceutical industry, as detailed from time to time in each
of Aegerion’s and QLT’s reports filed with the SEC and, in QLT’s
case, the CSA. Investors should not place undue reliance on
forward-looking statements. The forward-looking statements reflect
management’s current knowledge, assumptions, beliefs, estimates,
and expectations and express management’s current view of future
performance, results, and trends. Such statements are made as of
the date of this document, and except to the extent otherwise
required by applicable law, we undertake no obligation to update
such statements after this date. In addition to those risks
described above, risks and uncertainties that could cause our
actual results to materially differ from those described are
discussed in our filings with the SEC (including those described in
Item 1A of Aegerion’s and QLT’s Annual Reports on Form 10-K for
the year ended December 31, 2015 and Aegerion’s and QLT’s Quarterly
Reports on Form 10-Q for the quarter ended March 31, 2016, in each
case under the heading “Risk Factors” and elsewhere in such
filings).
Aegerion Contacts:
Investor Relations
Amanda Murphy
Associate Director, Investor Relations & Public Relations
(857) 242-5024
amanda.murphy@Aegerion.com
Media
Nathan Riggs / Jeffrey Taufield
Kekst
(212) 521-4800
nathan.riggs@kekst.com
jeffrey.taufield@kekst.com
QLT Contacts:
Investor Relations / Media
Nathan Riggs / Jeffrey Taufield
Kekst
(212) 521-4800
nathan.riggs@kekst.com
jeffrey.taufield@kekst.com
Additional Investor Contacts:
Lawrence Dennedy / Laurie Connell
MacKenzie Partners
(800) 322-2885 (Toll Free)
(212) 929-5500 (Call Collect)
ldennedy@mackenziepartners.com
lconnell@mackenziepartners.com
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