EPIX to acquire Predix for $90m
Later-stage products in the combined EPIX-Predix portfolio will be licensed to big pharma companies.
Gali Weinreb 3 Apr 06 18:04
Cambridge, Mass-based EPIX Pharmaceuticals Inc. (NASDAQ: EPIX), a developer of innovative pharmaceuticals for magnetic resonance imaging (MRI), will acquire Predix Pharmaceuticals Holdings Inc.
EPIX will acquire Predix in a transaction valued at approximately $90 million, including the assumption of net debt at closing. In addition, Predix shareholders will be paid a possible milestone payment of $35 million in cash, stock or a combination of both based on the achievement of certain clinical or strategic milestones within a specified period of time.
Upon completion of the merger EPIX will issue to Predix stockholders shares of EPIX common stock such that Predix stockholders will own approximately 47% of the combined company‘s shares outstanding, and EPIX stockholders will own approximately 53%.
The combined company will have a broad pipeline of product candidates, an experienced management team and approximately $125 million in cash and marketable securities at the end of the first quarter.
Ramat Gan-based Predix was founded in 2000 by SVP Dr. Silvia Noiman, CSO Dr. Oren Becker, and Dr. Haim Aviv, the chairman and CEO of Pharmos Corporation (Nasdaq:PARS). (Aviv is no longer a shareholder). In August 2003, Predix merged with Physiome Sciences of the US.
In January 2005, Predix raised $43 million in a financing round led by Forward Ventures, Boston Millennia Partners, and CMEA Ventures, along with new investors Novel Bioventures, Yamanouchi Venture Capital, Yasuda and JAFCO Ventures, and previous investors OrbiMed Advisors LLC, S.R. One, Yozma Group, International Life Science Partners and PA Consulting. Despite its size, the round was oversubscribed. According to IVC data, Yozma owns 10% of the company.
In November 2005, Predix cancelled plans to go public, as demand for the share was reportedly less than half the $50 million that the company had hoped to raise at a company value of $232 million. Predix current market cap is $81.5 million.
EPIX is focused on the discovery and development of innovative pharmaceuticals for imaging that are designed to transform the diagnosis, treatment and monitoring of disease. EPIX‘s lead product Vasovist, a novel blood pool imaging agent, was approved by the European Commission for marketing in the 25 member countries of the European Union in October 2005, and is expected to be marketed in Europe by Schering AG. Vasovist also has been approved for sale in Switzerland. In the US, Vasovist was the subject of a second approvable letter received from the FDA in November, 2005. EPIX has a meeting with the FDA scheduled in early April 2006 to discuss a draft protocol for an additional Phase III trial of Vasovist. EPIX has additional imaging products in development, including EP-2104R, a thrombus-imaging agent in Phase II studies.
Predix is a privately-held pharmaceutical company focused on the discovery and development of novel, highly selective, small-molecule drugs that target G-Protein Coupled Receptors (GPCRs) and ion channels. Using its proprietary drug discovery technology and approach, Predix has advanced three internally discovered drug candidates into clinical trials and has six additional programs in preclinical development and discovery.
In addition to Vasovist, the combined company will have PRX-00023 in Phase III for anxiety, and expected to enter Phase II for depression in 2007; EP-2104R in Phase II for imaging arterial and venous blood clots; PRX-03140 which has completed Phase Ib trials and is expected to enter Phase II for Alzheimer‘s disease later this year; PRX-08066 in Phase Ib development for pulmonary arterial hypertension; and a portfolio of several pre-clinical product candidates.
The intention of the combined company is to license later-stage products to larger pharmaceutical or biotechnology companies at a point where it can maximize the value of these products; discussions regarding these potential partnerships have been initiated and are ongoing.
EPIX Interim CEO Michael Astrue said, "One of our goals has been to enter into a transformative transaction to make EPIX a growth company once again, with a robust portfolio of product candidates. The EPIX Board of directors has had the opportunity to evaluate many terrific privately-held therapeutics companies based on criteria we established last September. The result of this process is that we have selected Predix as the first and best choice to create a combined company that gives us many strong opportunities for growth.
"Predix has three promising products in the clinic, an innovative technology platform that has the ability to generate additional drug candidates, and a dynamic leadership team. We believe that this transaction will create a Massachusetts-based specialty pharmaceutical company with significant and lasting value.“
Predix president and CEO Dr. Michael G. Kauffman MD Ph.D said, "The combination of EPIX‘s imaging product portfolio and our therapeutic product pipeline diversifies our risks and provides us with the potential for nearer-term cash flow through royalty revenues. I am excited about the combined capabilities of the two companies because I believe that their complementary nature will enhance our ability to improve patients‘ lives by developing products that meet significant, unmet clinical needs and thereby drive significant shareholder value.“
Following the completion of the transaction, Kauffman will become CEO of the combined company.
Published by Globes [online], Israel business news - www.globes.co.il - on April 3, 2006 http://www.globes.co.il/serveen/globes/DocView.asp?did=1000079857