Antisoma plc (UK) - Antisoma to Acquire Boston-Based Xanthus Pharmaceuticals
LONDON, and BOSTON, 16 May 2008 - Cancer-focused biotechnology company Antisoma today announces that it has entered into an agreement to acquire private US oncology company Xanthus Pharmaceuticals, Inc. in an all-share deal valued at GBP 26.8 million (USD 52.2 million). Simultaneously, Antisoma has executed a fundraising that will provide an additional GBP 20.9 million before expenses to the Enlarged Group
A webcast/conference call will be held today at 2pm BST. The webcast can be accessed via Antisoma's website at www.antisoma.com and the call by dialling +44 (0)20 8609 1435 (UK toll-free 0808 109 1498) and using the participant PIN code 816385#. A recording will also be available afterwards on the Antisoma website.
* Acquisition adds three major assets to Antisoma's pipeline, including phase III oncology drug Xanafide and US rights to oral fludarabine, a niche oncology product in registration with the FDA
* Acquisition gives Antisoma a substantially more mature and diverse pipeline, including two phase III drugs and one in registration among seven drugs in the clinic
* Linked fundraising of GBP 20.9 million gives the combined entity a strong balance sheet with starting cash of around GBP 67 million that is expected to meet the next two years' requirements
* New assets add to opportunities for out-licensing deals, which, together with potential milestone receipts, could extend Antisoma's cash life beyond the results of the pivotal phase III lung cancer trial of its potential blockbuster ASA404
Glyn Edwards, CEO of Antisoma, said: "This is a transforming deal. Combining Antisoma and Xanthus produces a company with the critical mass and mature pipeline needed to become a major player in oncology."
Richard T. Dean, PhD, CEO of Xanthus, added: "We're delighted to be joining forces with one of the emerging stars in oncology to produce a company with an impressive portfolio of drug candidates and the resources to maximise their value."
The key assets added to the Antisoma portfolio are:
* Xanafide - in a pivotal phase III trial in secondary acute myeloid leukaemia (secondary AML), and with the potential to be the first drug to gain a specific marketing authorisation for this under-served indication, as well as having potential for wider application in other haematological malignancies. The drug is a DNA-intercalating agent with an action distinct from other approved or investigational drugs and with the ability to evade multi-drug resistance mechanisms that often limit the effectiveness of chemotherapy treatments; Xanafide has orphan drug status in both the US and the EU.
* Oral fludarabine (US rights) - has been submitted to the FDA for marketing approval for the second-line treatment of chronic lymphocytic leukaemia (CLL) and represents an attractive niche US oncology sales opportunity; this is the oral formulation of the widely used nucleoside analogue fludarabine. Oral fludarabine is marketed outside the US by Bayer-Schering Pharma AG and has potential advantages over intravenous fludarabine, for which aggregate US sales in 2007 were approximately USD 54 million. Xanthus has gained US orphan drug status for oral fludarabine in CLL.
* Flt3 programme - promising preclinical selective Flt3 inhibitors being developed for non-oncology indications and therefore representing a valuable out-licensing opportunity; drugs from this programme have shown regenerative effects in a multiple sclerosis model and activity in models of both rheumatoid arthritis and inflammatory bowel disease.
The Directors believe that Xanthus represents an excellent strategic fit for Antisoma for the following reasons:
* Pipeline maturation: Since Xanafide and oral fludarabine are at an advanced stage of development, the acquisition will yield an Enlarged Group with a substantially more mature pipeline, including two products in phase III and another in registration. This will diversify and reduce the Group's overall risk and significantly increase the opportunities to bring drugs to market over the next three to five years.
* Critical mass: Addition of Xanafide and oral fludarabine to Antisoma's clinical portfolio will provide the Company with critical mass while maintaining a clear focus on novel, first-in-class oncology drugs. After the acquisition, Antisoma will have an enhanced drug development team based in London and Boston.
* Significant market opportunity: Xanafide represents an attractive phase III oncology product candidate with strong differentiation from competitor agents and the opportunity to be the first agent to gain specific marketing authorisations for the underserved indication of secondary AML, as well as upside potential related to possible application in other blood cancer settings.
* Lower-risk niche opportunity: Oral fludarabine represents an attractive niche US oncology sales opportunity, with the potential to generate sales revenues before other Group products reach the market. The product has a relatively low risk profile, since it is approved and sold in more than 50 countries worldwide outside of the US by its licensor Bayer-Schering.
* Out-licensing opportunity: Xanthus's Flt3 programme is a promising non-oncology asset with potential in auto-immune conditions such as multiple sclerosis, rheumatoid arthritis and inflammatory bowel diseases, and from which value may be realised through partnering.
* Strong balance sheet: Following the Fundraising the Enlarged Group is estimated to have approximately GBP 67 million in cash and equivalents and short-term investments. The Directors plan that this will cover the next two years' cash requirements. There is also the potential to extend this cash runway through receipt of milestone payments or payments from out-licensing deals. The new late-stage assets from Xanthus's pipeline also have the potential to accelerate the Group's progress towards generation of revenues from product sales.
Current plans for the development of the acquired assets are as follows:
* Antisoma intends to market Xanafide itself in the US, while seeking partners for potential commercialisation in Europe and Japan. Antisoma will review the design of the ongoing phase III pivotal study and its statistical power before providing guidance on the timing of potential applications for marketing authorisations.
* Antisoma will consider how best to realise the maximum value from oral fludarabine. Options include Antisoma commercialising the drug itself, formation of a partnership to sell the drug or wholesale divestment to a third party. The Directors believe that the drug could gain approval in 2009.
* Antisoma intends to continue preclinical work on the Flt3 inhibitor programme to produce optimised molecules for development in the target indications referred to above. Antisoma intends to produce a preclinical package suitable to support partnering.
* An additional agent, P2045, has completed phase I trials in non-small cell lung cancer and next steps on this drug are under review.
Development will be halted on two other Xanthus products in early-stage oncology trials, Clomet and Symadex.
Plans for development of any drug may be subject to change as a result of regular portfolio reviews. Plans for Antisoma's existing portfolio products are as follows.
* ASA404 is being developed by Novartis, which recently started a pivotal phase III trial in non-small cell lung cancer; survival data from a phase II study in prostate cancer are expected during the second half of this year * AS1411 is in a phase II trial in AML, with first data expected this quarter; a phase II study in renal cancer is planned and is now likely to start before the end of 2008 rather than in 2009; plans for a third indication are now being deferred for the period immediately following the acquisition * AS1402 will start a phase II study in breast cancer later this year * AS1409 is in a phase I trial in renal cancer and melanoma
Transaction details To acquire the entire issued share capital of Xanthus, Antisoma will issue to Xanthus's shareholders an aggregate of 97.3 million new ordinary shares in the share capital of Antisoma if the closing date is on or prior to 16 June 2008 or an aggregate of 99.3 million new ordinary shares in the share capital of Antisoma if the closing date is on or after 17 June 2008, representing approximately 22% of the issued share capital of Antisoma. If the total consolidated balance sheet liabilities of Xanthus upon closing of the transaction are in excess of USD 4.2 million net of cash, Antisoma will be entitled to reduce the consideration payable by the amount of such excess. Up to 10% of the total consideration payable will be held back by the Company until 18 months after the closing date of the transaction, subject to deductions based on claims for indemnity by Antisoma or as otherwise allowed under the terms of the acquisition agreement. Based on Antisoma's closing share price on 15 May 2008 of 27.5 pence, Xanthus is valued at GBP 26.8 million or approximately USD 52.2 million. It is a condition to closing that the Xanthus shareholders agree not to dispose of the new ordinary shares that they receive in satisfaction of the consideration payable to them for a period of one year from the closing date, subject to certain exceptions. Closing of the transaction is expected to be on or around 10 June 2008.
EGM The acquisition of Xanthus and, as a consequence, the associated fundraising are conditional on approval of the acquisition by Antisoma's shareholders at an EGM to be held on or around 9 June 2008. The Antisoma Board recommends that shareholders support the acquisition and fundraising. A prospectus relating to the acquisition and fundraising and containing a Notice of EGM has also been sent to shareholders today. Copies are also available for viewing at Antisoma's offices, situated at Chiswick Park Building 5, 566 Chiswick High Road, London W4 5YF and at the offices of Piper Jaffray situated at One South Place, London EC2M 2RB. The EGM also includes resolutions to restore Antisoma's ability to issue new shares and to issue new shares for cash under a disapplication of pre-emption rights, such that these authorities are both similar in percentage terms to those existing before the acquisition and fundraising. The Directors believe that these authorities will provide flexibility to exploit any new opportunities to grow the business.
Glyn Edwards, CEO Daniel Elger, Director of Communications +44 (0)20 8799 8200 Antisoma plc
Mark Court/Lisa Baderoon/Rebecca Skye Dietrich +44 (0)20 7466 5000 Buchanan Communications
Brian Korb +1 646 378 2923 The Trout Group
Neil Mackison +44 (0)20 3142 8700 Rupert Winckler
Further notes on the acquisition and fundraising The value of the gross assets attributable to Xanthus was USD 9.7 million (approximately GBP 4.9 million) as at 31 December 2007, being the date of its latest financial statements. The net loss attributable to the assets of Xanthus for the year to 31 December 2007 (being the date of its latest financial statements) was USD 33.2 million (approximately GBP 16.6 million).
The Directors believe that, had the acquisition taken place on 1 July 2006, it would have had the effect of increasing the Group's expenditure, thereby increasing the Group's loss for the year commencing on that date and decreasing the Group's profit for the six months ended 31 December 2007. This statement should not be interpreted to imply any forecast in respect of the earnings per share of Antisoma for the first full year following the transaction.
Piper Jaffray Ltd., which is regulated in the United Kingdom by the Financial Services Authority and is a member of the London Stock Exchange, is acting exclusively for Antisoma in relation to the Xanthus acquisition and the Placing and will not be responsible to anyone other than Antisoma plc for providing the protections afforded to clients of Piper Jaffray Ltd. nor for providing advice in relation to the acquisition and the Placing or any other transaction or arrangement referred to in this announcement.
Words and expressions used in this announcement will have the same meaning as defined in the prospectus and circular that will be sent to shareholders.
This document does not constitute an offer or invitation to purchase or subscribe for any securities of Antisoma and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.
The information contained herein is not for publication, distribution or release in or into the United States. The material set forth herein is for informational purposes only and is not intended, and should not be construed, as an offer of securities for sale in the United States. The securities described herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or the laws of any state or other jurisdiction, and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable laws of any state or other jurisdiction. There is no intention to register any portion of the securities described herein in the United States.
This document is not an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction where such offer or sale is not permitted.
Certain matters discussed in this statement are forward looking statements that are subject to a number of risks and uncertainties that could cause actual results to differ materially from results, performance or achievements expressed or implied by such statements. These risks and uncertainties may be associated with product discovery and development or licensing activities, including statements regarding the clinical development programmes, the expected timing of clinical trials and regulatory filings, out-licensing opportunities, and funding requirements. Such statements are based on management's current expectations, but actual results may differ materially.
Background on Antisoma Headquartered in London, UK, Antisoma is a biopharmaceutical company that develops novel products for the treatment of cancer. Antisoma fills its development pipeline by acquiring promising new product candidates from internationally recognised academic or cancer research institutions. Its core activity is the preclinical and clinical development of these drug candidates. Please visit www.antisoma.com for further information about Antisoma.
Xanthus Pharmaceuticals, Inc. is developing a portfolio of novel, clinical-stage, small-molecule therapeutic candidates through a management team whose accomplished track record encompasses all aspects of drug development, from discovery through regulatory approval and commercialisation. The Company is applying its expertise to advance its current pipeline to address significant unmet medical need in oncology and autoimmune diseases. Xanthus is headquartered in Cambridge, Massachusetts with an additional facility in Montreal, Quebec. More information is available at www.xanthus.com.