US drug firm Cephalon makes $329 million offer for Australia's Arana
27 Feb 2009
The pharmaceutical industry may see yet another major deal soon with Cephalon Inc revealing plans to make a $318 million offer for Arana Therapeutics Limited, an Australian biotechnology company that is developing biologic compounds for inflammatory diseases and cancer.
Arana has a pipeline of biologic compounds for inflammatory diseases and cancer at various stages of development. Arana's lead new drug candidate, ART621, is being developed as a potential treatment for psoriasis and rheumatoid arthritis.
The takeover offer has the support of Arana's independent directors, and will be recommended to Arana shareholders, according to Cephalon of Frazer, Pennsylvania. Cephalon intends to fund the offer using a portion of its existing cash balance and said the deal won't change its 2009 adjusted income outlook.
Cephalon intends to offer $1.40 cash for each share of Arana stock - a 69 per cent premium over Arana's closing price on 25 February. If Cephalon obtains a relevant interest in 90 per cent of Arana shares and the offer conditions are satisfied or waived, Cephalon will increase its offer price by 5 Australian cents per share.
The Cephalon offer values Arana's ordinary equity at approximately $318 million (or $329 million based on the Increased Cash Offer). To support its bid, Cephalon has acquired a 19.9 per cent ownership position in Arana from the company's two largest shareholders, Start-up Australia Ventures Pty Ltd and Rockwell Securities Limited.
''Arana would bolster our burgeoning inflammatory disease pipeline as well as our oncology pipeline,'' said Frank Baldino Jr, chairman and CEO of Cephalon. ''Arana has an established protein engineering technology platform that transforms proteins, including antibodies, into potent drug candidates.''
''Cephalon is offering Arana shareholders the opportunity to de-risk their investment portfolios by taking cash for their shares at a time when cash provides certainty and stability,'' said Kevin Buchi, chief financial officer at Cephalon. ''We are better equipped to take Arana's lead compound, ART621, through clinical development and, pending the success of clinical trials.
