AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG) and Allos
Therapeutics, Inc. (NASDAQ: ALTH) today announced that they have
entered into a definitive merger agreement under which the
companies will combine in an all-stock merger with a total equity
value of approximately $686 million. The transaction is expected to
result in annual cost savings synergies of between $55 million and
$60 million, the majority of which are expected to be realized in
the first fiscal year after closing.
Under the terms of the transaction, which has been approved by
the boards of directors of both companies, Allos stockholders will
receive a fixed ratio of 0.1282 shares of AMAG common stock for
each share of Allos common stock they own. Following the
consummation of the merger, AMAG stockholders will own
approximately 61 percent of the combined company and Allos
stockholders will own approximately 39 percent of the combined
company.
The Board of Directors of the combined company will have 9
members in total, including 5 members nominated by the Board of
AMAG and 4 members nominated by the Board of Allos. Brian J.G.
Pereira, MD, President and Chief Executive Officer of AMAG, will
serve as President and Chief Executive Officer of the combined
company, and Paul L. Berns, President and Chief Executive Officer
of Allos, will serve on the combined company’s Board of Directors.
Michael Narachi, AMAG’s current Chairman will serve as Chairman of
the combined company’s Board of Directors. The combined company
will have headquarters in Lexington, MA and is expected to be
renamed to reflect its strategic focus. The transaction is expected
to close in the fourth quarter of 2011 and is structured to be a
tax-free reorganization for the stockholders of both companies.
The combined company will have a portfolio of commercial
products in the U.S. comprised of AMAG’s FERAHEME® (ferumoxytol
injection) and Allos’ FOLOTYN® (pralatrexate injection). FERAHEME
is indicated for the treatment of iron deficiency anemia (IDA) in
adult patients with chronic kidney disease (CKD), and FOLOTYN is
indicated for use as a single agent for patients with relapsed or
refractory peripheral T-cell lymphoma (PTCL).
Strategic and Financial Benefits of the Transaction
- Combined company will have a commercial
portfolio of products focused on high-potential markets
- The overall U.S. non-dialysis IV iron
market is estimated to be $400 million1. Approximately 1.6 million
Americans are estimated to have non-dialysis dependent CKD and IDA,
and only a fraction are treated.
- The total U.S. market for second line
peripheral T-cell lymphoma is estimated to be $400 million2. The
total U.S. relapsed or refractory PTCL treatable population is
estimated to be approximately 10,000 patients.
- Combined company to leverage customer
relationships for benefit of both brands
- Common commercial call points in
hematology/oncology clinics and hospitals
- Overlap in customer base expected to
facilitate increased brand awareness and market penetration
- Annual estimated synergies of $55
million to $60 million from elimination of costs, the majority of
which are expected to be realized in the first fiscal year after
closing. One-time costs associated with the transaction are
expected to total approximately $35 million to $38 million.
- Strong balance sheet for business
reinvestment and further portfolio diversification
- As of June 30, 2011, the two companies
had combined unaudited cash, cash equivalents, and investments of
$373.7 million
- Combined company’s cash position
expected to be sufficient to reach cash flow positive status
- Combined company has potential to earn
up to $530.5 million in ex-U.S. development and commercial
milestone payments from established collaborations and
partnerships. Additionally, the combined company will be eligible
to receive double-digit, tiered royalties based on product sales in
the partnered regions.
- Collaborations outside the U.S. with
industry leaders — Takeda Pharmaceutical Company Limited (Takeda)
in several ex-U.S. regions and 3Sbio in China for FERAHEME, and
Mundipharma International Corporation Limited (Mundipharma) for
FOLOTYN
- Global development program expected to
drive expanded market opportunities for both brands
- FERAHEME marketing applications are
under review in the EU, Canada and Switzerland for the treatment of
IDA in adult CKD patients; regulatory decisions expected in the EU
and Canada in 2011 and in Switzerland in 2012
- FERAHEME is being evaluated in a global
registrational program for a broad IDA indication; completion of
enrollment expected by the end of 2011
- FOLOTYN marketing application is under
review in the EU for the treatment of patients with relapsed or
refractory PTCL; regulatory decision expected in the EU in early
2012
- FOLOTYN will be evaluated in two global
Phase 3 registrational studies exploring its activity in first-line
PTCL and relapsed or refractory cutaneous T-cell lymphoma
“We are very excited about this merger as it creates a combined
company with an enhanced commercial presence in attractive market
segments supported by a more efficient organizational structure,”
said Brian J.G. Pereira, MD, CEO of AMAG. “As a new company, we
will remain committed to the development and commercialization of
innovative therapies for the treatment of serious and
life-threatening diseases. Together, we will have a stronger
balance sheet with the resources to further expand our portfolio
through the in-licensing or acquisition of new products, providing
new opportunities for employees, effective treatments for patients
and enhanced value for stockholders.”
“This merger provides Allos and AMAG stockholders with a unique
opportunity to benefit from a new company with a diversified
portfolio of commercial products and significantly improved
operating leverage,” said Paul L. Berns, CEO of Allos. “We believe
that Allos’ product development and commercial experience in
oncology will be a valuable asset for the combined company and will
help both brands achieve their full market potential while
improving the lives of patients.”
Agreements to Vote in Favor of the Transaction
Directors and named executive officers of each of the companies,
along with Warburg Pincus, Allos’ largest stockholder, have entered
into voting agreements pursuant to which they have agreed to vote
all of their shares in favor of the transaction.
Approvals
The transaction is subject to approval by both companies’
stockholders and other customary closing conditions, including
clearance under the Hart-Scott-Rodino Act.
Combined Company Product Offering
AMAG received FDA approval for FERAHEME in June 2009 for the
treatment of IDA in adult patients with CKD. Patients with IDA and
CKD are treated in a variety of settings, including
hematology/oncology infusion centers, hospitals, and nephrology
clinics where many CKD patients receive IV iron. Additionally, IDA
and CKD are both common concomitant conditions in oncology
patients, and FERAHEME is often used in these patients as a
supportive care therapeutic. Consequently, hematology/oncology
infusion centers represented 30 percent of FERAHEME provider demand
in the U.S. in 2010. FERAHEME has patent protection through 2020,
potentially longer with extensions.
FOLOTYN, a folate analogue metabolic inhibitor, was discovered
by Sloan-Kettering Institute for Cancer Research, SRI International
and Southern Research Institute and developed by Allos
Therapeutics. In September 2009, the U.S. Food and Drug
Administration (FDA) granted accelerated approval for FOLOTYN for
use as a single agent for the treatment of patients with relapsed
or refractory PTCL. This indication is based on overall response
rate. Clinical benefit such as improvement in progression-free
survival or overall survival has not yet been demonstrated. FOLOTYN
has been available to patients in the U.S. since October 2009. An
updated analysis of data from PROPEL, the pivotal study of FOLOTYN
in patients with relapsed or refractory PTCL, was published in the
March 20, 2011 issue of the Journal of Clinical Oncology. FOLOTYN
has patent protection through 2017, potentially longer with
extensions.
Partnership Payments and Milestones
The combined company has the potential to earn up to $530.5
million in ex-U.S. development and commercial milestone payments
from established collaborations and partnerships. Through its
alliance with Takeda for FERAHEME in Europe and other select
territories, AMAG has the potential to earn up to $220 million by
meeting development and commercial milestones, including up to $33
million of near-term potential milestones related to approvals and
commercial launches in the EU and Canada for the treatment of
patients with IDA and CKD.
Under a collaboration agreement with Mundipharma, Allos retains
full commercialization rights for FOLOTYN in the U.S. and Canada,
with Mundipharma having exclusive rights to commercialize FOLOTYN
in all other countries. Under the collaboration, Allos received an
upfront payment of $50 million in May 2011 and has the potential to
earn regulatory and commercial progress- and sales-dependent
milestone payments of up to $310.5 million. Allos is also entitled
to receive tiered double-digit royalties based on net sales of
FOLOTYN within Mundipharma’s licensed territories. Allos and
Mundipharma will jointly fund development costs, initially on a
60:40 basis, which will change to a 50:50 basis if certain
pre-defined milestones are achieved, including approval of the
Marketing Authorisation Application (MAA) currently under review to
market FOLOTYN in the European Union.
Quarterly Results
AMAG will announce its results for the second quarter 2011 on
July 26, 2011. AMAG currently expects total revenues for the second
quarter to be between $15.3 million and $15.5 million, including
between $12.7 million and $12.9 million of net FERAHEME product
revenues.
Allos will announce its results for the second quarter 2011 on
August 4, 2011. Allos currently expects FOLOTYN net product sales
for the second quarter to be approximately $11.0 million.
Both companies will provide further details on their respective
quarterly results during their scheduled quarterly conference
calls.
Conference Call
A conference call is scheduled for July 20, 2011 at 8:00 AM
Eastern to discuss the transaction. Listeners in the U.S. may
access this call by dialing (866) 610-1072. Listeners outside the
U.S. may access the call by dialing (404) 991-3932 (toll charges
apply). The ID# for this call is 84818634. For interested
individuals unable to join the call, a replay will be available
through August 3, 2011 by dialing (855) 859-2056 or (404) 537-3406,
pass code 84818634. This conference call will also be webcast.
Listeners may access the webcast, which is available on the
investor relations pages of both companies’ websites:
www.amagpharma.com and www.allos.com.
Morgan Stanley is acting as AMAG’s financial advisor, and Cooley
LLP is acting as legal counsel to AMAG. J.P. Morgan Securities LLC
is acting as Allos’ financial advisor, and Latham & Watkins LLP
is acting as legal counsel to Allos.
About AMAG Pharmaceuticals, Inc.
AMAG Pharmaceuticals, Inc. is a biopharmaceutical company
focused on the development and commercialization of a therapeutic
iron compound to treat iron deficiency anemia. For additional
company information, please visit www.amagpharma.com.
About Allos Therapeutics
Allos Therapeutics, Inc. (Nasdaq: ALTH) is a biopharmaceutical
company committed to the development and commercialization of
innovative anti-cancer therapeutics. Allos is currently focused on
the development and commercialization of FOLOTYN(R) (pralatrexate
injection), a folate analogue metabolic inhibitor. FOLOTYN is
approved in the U.S. for the treatment of patients with relapsed or
refractory PTCL. For additional information, please visit
www.allos.com.
About FERAHEME
In the United States, FERAHEME® (ferumoxytol) Injection for
Intravenous (IV) use is indicated for the treatment of iron
deficiency anemia in adult chronic kidney disease (CKD) patients.
FERAHEME received marketing approval from the U.S. Food and Drug
Administration on June 30, 2009 and was commercially launched by
AMAG in the U.S. shortly thereafter. For additional product
information, please visit www.feraheme.com.
Important Safety Information About FERAHEME
Indication and contraindications
FERAHEME is indicated for the treatment of iron deficiency
anemia in adult patients with chronic kidney disease. FERAHEME is
contraindicated in patients with known hypersensitivity to Feraheme
or any of its components.
Warnings and precautions
Serious hypersensitivity reactions, including
anaphylactic-type reactions, some of which have been
life-threatening and fatal, have been reported in patients
receiving FERAHEME. Observe patients for signs and symptoms
of hypersensitivity during and after FERAHEME administration for at
least 30 minutes and until clinically stable following completion
of each administration. Only administer the drug when
personnel and therapies are immediately available for the treatment
of anaphylaxis and other hypersensitivity reactions. Anaphylactic
type reactions, presenting with cardiac/cardiorespiratory arrest,
clinically significant hypotension, syncope, and unresponsiveness
have been reported in the post-marketing experience. In
clinical studies, serious hypersensitivity reactions were reported
in 0.2% (3/1,726) of subjects receiving FERAHEME. Other adverse
reactions potentially associated with hypersensitivity (e.g.,
pruritus, rash, urticaria or wheezing) were reported in 3.7%
(63/1,726) of subjects. Severe adverse reactions of clinically
significant hypotension have been reported in the post-marketing
experience. In clinical studies, hypotension was reported in
1.9% (33/1,726) of subjects, including three patients with serious
hypotensive reactions. Monitor for signs and symptoms of
hypotension following each FERAHEME injection. Excessive therapy
with parenteral iron can lead to excess storage of iron with the
possibility of iatrogenic hemosiderosis. Patients should be
regularly monitored for hematologic response during parenteral iron
therapy, noting that lab assays may overestimate serum iron and
transferrin bound iron values in the 24 hours following
administration of FERAHEME. As a superparamagnetic iron oxide,
FERAHEME may transiently affect magnetic resonance diagnostic
imaging studies for up to 3 months following the last FERAHEME
dose. FERAHEME will not affect X-ray, CT, PET, SPECT, ultrasound,
or nuclear imaging.
Adverse reactions
In clinical trials, the most commonly occurring adverse
reactions in Feraheme treated patients versus oral iron treated
patients reported in ≥ 2% of chronic kidney disease patients were
diarrhea (4.0% vs. 8.2%), nausea (3.1% vs. 7.5%), dizziness (2.6%
vs. 1.8%), hypotension (2.5% vs. 0.4%), constipation (2.1% vs.
5.7%) and peripheral edema (2.0% vs. 3.2%). In clinical trials,
adverse reactions leading to treatment discontinuation and
occurring in 2 or more Feraheme treated patients included
hypotension, infusion site swelling, increased serum ferritin
level, chest pain, diarrhea, dizziness, ecchymosis, pruritus,
chronic renal failure, and urticaria.
Post-marketing safety experience
The following adverse reactions have been identified during
post-approval use of FERAHEME. Because these reactions are reported
voluntarily from a population of uncertain size, it is not always
possible to reliably estimate their frequency or establish a causal
relationship to drug exposure.
The following serious adverse reactions have been reported from
the post-marketing spontaneous reports with FERAHEME:
life-threatening anaphylactic-type reactions,
cardiac/cardiorespiratory arrest, clinically significant
hypotension, syncope, unresponsiveness, loss of consciousness,
tachycardia/rhythm abnormalities, angioedema, ischemic myocardial
events, congestive heart failure, pulse absent, and cyanosis. These
adverse reactions have occurred up to 30 minutes after the
administration of FERAHEME injection. Reactions have occurred
following the first dose or subsequent doses of FERAHEME.
For full prescribing information, please visit
www.feraheme.com.
About FOLOTYN
FOLOTYN, a folate analogue metabolic inhibitor, was discovered
by Sloan-Kettering Institute for Cancer Research, SRI International
and Southern Research Institute and developed by Allos
Therapeutics. In September 2009, the U.S. Food and Drug
Administration (FDA) granted accelerated approval for FOLOTYN for
use as a single agent for the treatment of patients with relapsed
or refractory PTCL. This indication is based on overall response
rate. Clinical benefit such as improvement in progression-free
survival or overall survival has not yet been demonstrated. FOLOTYN
has been available to patients in the U.S. since October 2009. An
updated analysis of data from PROPEL, the pivotal study of FOLOTYN
in patients with relapsed or refractory PTCL, was published in the
March 20, 2011 issue of the Journal of Clinical Oncology. FOLOTYN
has patent protection through 2017, potentially longer with
extensions.
IMPORTANT SAFETY INFORMATION
Warnings and Precautions
FOLOTYN may suppress bone marrow function, manifested by
thrombocytopenia, neutropenia, and anemia. Monitor blood counts and
omit or modify dose for hematologic toxicities.
Mucositis may occur. If ≥Grade 2 mucositis is observed, omit or
modify dose. Patients should be instructed to take folic acid and
receive vitamin B12 to potentially reduce treatment-related
hematological toxicity and mucositis.
Fatal dermatologic reactions may occur. Dermatologic reactions
may be progressive and increase in severity with further treatment.
Patients with dermatologic reactions should be monitored closely,
and if severe, FOLOTYN should be withheld or discontinued.
Tumor lysis syndrome may occur. Monitor patients and treat if
needed.
FOLOTYN can cause fetal harm. Women should avoid becoming
pregnant while being treated with FOLOTYN and pregnant women should
be informed of the potential harm to the fetus.
Use caution and monitor patients when administering FOLOTYN to
patients with moderate to severe renal function impairment.
Elevated liver function test abnormalities may occur and require
monitoring. If liver function test abnormalities are ≥Grade 3, omit
or modify dose.
Adverse Reactions
The most common adverse reactions were mucositis (70%),
thrombocytopenia (41%), nausea (40%), and fatigue (36%). The most
common serious adverse events are pyrexia, mucositis, sepsis,
febrile neutropenia, dehydration, dyspnea, and
thrombocytopenia.
Use in Specific Patient Population
Nursing mothers should be advised to discontinue nursing or the
drug, taking into consideration the importance of the drug to the
mother.
Drug Interactions
Co-administration of drugs subject to renal clearance (e.g.,
probenecid, NSAIDs, and trimethoprim/sulfamethoxazole) may result
in delayed renal clearance.
Please see FOLOTYN Full Prescribing Information at
www.FOLOTYN.com.
Additional Information and Where You Can Find It
This communication does not constitute an offer to sell or
the solicitation of an offer to buy any securities or a
solicitation of any vote or approval. The proposed merger between
AMAG and Allos will be submitted to the respective stockholders of
AMAG and Allos for their consideration.
AMAG will file a Registration Statement on Form S-4 containing a
joint proxy statement/prospectus of Allos and AMAG and other
documents concerning the proposed acquisition with the Securities
and Exchange Commission (the “SEC”). Investors are urged to read
the joint proxy statement/prospectus when it becomes available and
other relevant documents filed with the SEC because they will
contain important information. Security holders may obtain a free
copy of the proxy statement/prospectus (when it is available) and
other documents filed by Allos and AMAG with the SEC at the SEC’s
website at www.sec.gov. The joint proxy statement/prospectus and
other documents may also be obtained for free by contacting Allos’
Investor Relations by e-mail at investorrelations@allos.com, by
telephone at (303) 426-6262 or by mail at Investor Relations, Allos
Therapeutics, Inc., 11080 CirclePoint Road, Suite 200, Westminster,
CO 80020 or by contacting AMAG’s Investor Relations by e-mail at
cmiceli@amagpharma.com, by telephone at (617) 498-3361 or by mail
at Investor Relations, AMAG Pharmaceuticals, Inc., 100 Hayden
Avenue, Lexington, MA 02421.
Allos, AMAG, certain of their respective directors, executive
officers, members of management and employees may, under the rules
of the SEC, be deemed to be participants in the solicitation of
proxies in connection with the proposed merger. Information
regarding Allos’ directors and executive officers and their
beneficial ownership of Allos’ common stock is also set forth in
Allos’ annual proxy statement on Schedule 14A filed with the SEC on
April 29, 2011. This document is available free of charge at the
SEC’s website at www.sec.gov or by going to Allos’ Investors page
on its corporate website at www.allos.com. Information concerning
AMAG’s directors and executive officers and their beneficial
ownership of AMAG’s common stock is set forth in AMAG’s annual
proxy statement on Schedule 14A filed with the SEC on April 18,
2011. This document is available free of charge at the SEC’s
website at www.sec.gov or by going to AMAG’s Investors page on its
corporate website at www.amagpharma.com. Additional information
regarding the persons who may, under the rules of the SEC, be
deemed “participants” in the solicitation of proxies in connection
with the proposed merger, and a description of their direct and
indirect interests in the proposed merger, which may differ from
the interests of Allos’ investors or AMAG’s investors generally,
will be set forth in the joint proxy statement/prospectus when it
is filed with the SEC.
Forward-Looking Statements
This communication contains forward-looking statements that are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Terminology such as
“may,” “will,” “should,” “expects,” “intends,” “plans,”
“anticipates,” “believes,” “estimates,” “predicts,” “projects,”
“potential,” “continue,” and other similar terminology or the
negative of these terms, are intended to identify such
forward-looking statements, but their absence does not mean that a
particular statement is not forward-looking. Such forward-looking
statements are not guarantees of future performance and are subject
to risks and uncertainties that may cause actual results to differ
materially from those anticipated by the forward-looking
statements. These statements are not guarantees of future
performance, involve risks, uncertainties and assumptions that are
difficult to predict, and are based upon assumptions as to future
events that may not prove accurate. Examples of such forward
looking statements include Allos and AMAG’s expectations with
respect to the synergies, costs and other anticipated financial
impacts of the proposed transaction; future financial and operating
results of the combined company; the combined company's plans,
objectives, expectations and intentions with respect to future
operations; approval of the proposed transaction by requisite
stockholders; the satisfaction of the closing conditions to the
proposed transaction; and the timing of the completion of the
proposed transaction. In any forward-looking statement in which
AMAG or Allos expresses an expectation or belief as to future
results, such expectation or belief is expressed in good faith and
believed to have a reasonable basis, but there can be no assurance
that the statement or expectation or belief will result or be
achieved or accomplished. The following factors, among others,
could cause actual results to differ materially from those
described in the forward-looking statements: failure of Allos or
AMAG stockholders to approve the proposed transaction; the
challenges and costs of closing the proposed transaction,
integrating the two companies, restructuring the combined company;
the possibility that the expected synergies will not be realized,
or will not be realized within the expected time period; the
ability to retain key employees; and other economic, business,
competitive, and/or regulatory factors affecting the businesses of
Allos and AMAG generally, including those set forth in the filings
of Allos and AMAG with the Securities and Exchange Commission,
especially in the “Risk Factors” section of Allos’ Quarterly Report
on Form 10-Q for the quarter ended March 31, 2011 filed with
the SEC on May 10, 2011, the “Risk Factors” section of AMAG’s
Quarterly Report on Form 10-Q for the quarter ended March 31, 2011
filed with the SEC on May 9, 2011, and in Allos’ and AMAG’s other
periodic reports and filings with the SEC. Allos and AMAG cautions
investors not to place undue reliance on the forward-looking
statements contained herein. All forward-looking statements are
based on information currently available to Allos and AMAG on the
date hereof, and Allos and AMAG undertake no obligation to revise
or update these forward-looking statements to reflect events or
circumstances after the date of this press release, except as
required by law.
References:
1 IDA and CKD Market Sources: NDD-CKD: Coresh J, et al.
Prevalence of Chronic Kidney Disease in the United States. JAMA,
November 2007. Fishbane, S. et al. Iron Indicies in CKD in the
NHANES 1988-2004,CJASN, Jan. 2009, Vol 4, No. 1.
2 Incidence and 2nd line patients includes all PTCL subtypes;
estimated using market research studies, secondary reports,
independent 3rd party research, oncology benchmarks; 2010 U.S.
estimates based on Allos Therapeutics analysis; market size based
on range of average single agents used off-label in U.S. and is not
a FOLOTYN forecast
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