Peptech and Evogenix Merge to Form Antibody Powerhouse
May 7, 2007-Peptech Limited (ASX: PTD, AIM: PTDx) and antibody
therapeutics company, EvoGenix Limited (ASX: EGX), today announced
plans to merge, to form one of Australia’s largest
biotechnology companies and a company poised to become a high
profile player in the world wide antibody and protein therapeutics
sector. The merger represents a major milestone for both companies
and a key landmark for the Australian biotechnology industry in
developing a world class company of scale.
The vision for the new company will entail a demonstrable pathway
for rapid growth, as the high potential antibody products in the
combined pipeline progress through successful testing in patients.
The focus of the company is on developing significant
antibody/protein based franchises for the treatment of inflammatory
diseases, bone disease and cancer. Each of these therapeutic areas
represent substantial opportunities with successful antibody based
products achieving record sales growth in recent years to levels in
excess of a billion dollars annually.
The merged company will be led by Peptech CEO, Dr John Chiplin, and
a board made up of directors from both companies. A combined
management team with a strong record of achievement in the sector
will drive the future growth of the company. Dr Merilyn Sleigh,
EvoGenix CEO, will be retained in a senior advisory role. The
combined company will be renamed.
The merged entity will have an exceptionally strong balance sheet.
Peptech has substantial cash to fast track product development,
having earlier this year received more than $150 (US$130) million
from the sale of its share in UK company Domantis Limited to
GlaxoSmithKline. In addition the combined company receives on-going
revenue streams from Abbott and Johnson & Johnson in relation
to blockbuster antibody, anti-TNF drugs Humira® and
Remicade®. Peptech’s own “next generation”
anti-TNF drug will enter the clinic this month.
Consistent with the recently announced set of strategic options
facing the company, the Peptech Board is confident that this
transaction will add significantly to shareholder value.
Dr John Chiplin, CEO of Peptech, commented: “Consistent
with our previously announced strategy, this transaction creates a
combined entity which is poised to be a major player on the
world-wide antibody stage. We have genuinely built critical mass in
this Australian merger to compete aggressively in the fastest
growing sector of the international human therapeutic
market.” He further noted, “EvoGenix and Peptech are an
excellent strategic fit at all levels. EvoGenix has
revenue-generating technology with proven capabilities and linkages
that blend ideally with our own product development activities, to
deliver more rapid company growth and delivery of products to the
clinic.”
EvoGenix’s CEO, Dr Merilyn Sleigh, stated: “We believe
that this merger will be a truly transforming transaction for both
companies. The products, technology and capital assets of the new
company, will be combined with strong capabilities and critical
mass across all levels of its operation. This is a unique
opportunity for EvoGenix to step up to the next stage of its
development, continuing its rapid growth profile but within a
larger group with complementary skills and assets.”
The transaction in detail:
The acquisition is to be implemented through a scheme of
arrangement between EvoGenix and its shareholders (Scheme). Peptech
will acquire 100% of the issued shares in EvoGenix for cash and
shares totaling $1.12 per share, based on the closing price of
Peptech on Friday 4 May. Under terms of the Merger Implementation
Agreement (MIA), Peptech will offer 15 cents cash plus 0.5055
Peptech shares for each EvoGenix share on issue. This values
EvoGenix at approximately $156 million and represents a 33% premium
to EvoGenix’s last traded price on the ASX on 4 May, 2007 of
84.5 cents and a 39% premium to its 30 day volume average weighted
price.
Dr John Chiplin will be the CEO and Mel Bridges will be Chairman of
the merged entity. EvoGenix’s Chairman, Chris Harris, and a
non-executive director, Robin Beaumont, will join a restructured
Peptech board on completion of the proposed transaction. The
management and scientific staff of EvoGenix will continue within
the merged company, with current CEO, Dr Merilyn Sleigh, being
retained in an advisory role.
The merger is subject to EvoGenix shareholder approval and a review
by an independent expert. The EvoGenix Board of Directors
unanimously recommend shareholders accept and vote in favour of the
Scheme and confirm it is in the interest of EvoGenix shareholders
in the absence of a superior offer. In addition the directors of
EvoGenix intend to vote all of the shares they hold directly in
favour of the Share Scheme.
Start-up Australia Ventures Pty Limited (SUAV), which holds 30.5%
of EvoGenix shares, has committed to voting 19.9% of EvoGenix
shares in favour of the Scheme through a voting agreement with
Peptech, in the absence of a proposal valuing the company in excess
of 115% of the consideration payable by Peptech. 19.9% is the
maximum number of shares Peptech is allowed by law to control at
this time. SUAV was the founding investor in EvoGenix in 2001, when
the company was formed to develop technology derived from the
Cooperative Research Centre for Diagnostics, and CSIRO.
Peptech and EvoGenix have entered into an MIA which provides the
framework for implementing the proposed Share Scheme. The key terms
and conditions of the MIA are summarised in the Appendix.
Timing:
An Explanatory Booklet with full details of the proposed
transactions, including an
Independent Expert’s Report, is expected to be dispatched to
EvoGenix shareholders in June 2007. The meeting to approve the
Scheme is expected to be held in August.A more detailed timetable
for the approval and implementation of the proposed transaction
will be announced in due course.
Background to the merger:
Peptech was formed in 1985 and listed on the ASX in 1986. Peptech
has a proven track record in commercialising its assets, realising
over $300 million in revenues over the last six years. It has
substantial on-going revenue streams from its licensing agreements
with Abbott and Centocor, a subsidiary of Johnson & Johnson. It
is dedicated to developing and providing antibody and peptide-based
human therapeutic products for the treatment of cancer and
inflammatory diseases. It is transitioning to a mid-stage
development company as several of its products move from
preclinical development into human trials, starting with the
Company’s lead product, PN0621, a differentiated anti-TNF
compound based on a domain antibody. In addition to its ASX listing
Peptech is listed on AIM (PTDx). Peptech recently announced a
substantial ($6.6 million) grant from the Australian government
under the government’s Pharmaceuticals Partnerships Program
to be used towards the R & D costs that will be incurred over
the next two years. More information on the company is available at
www.peptech.com.
EvoGenix was formed in 2001, acquired US company Absalus Inc in
2005 and listed on the ASX in the same year. EvoGenix has
operations in Australia and the USA, and focuses on developing
antibody therapeutics. Through the 2005 acquisition, it
consolidated a powerful technology platform for converting research
stage antibodies into products suitable for human testing. Based on
its technology capabilities it has established collaborations with
GlaxoSmithKline, CSL and Australian company Vegenics. These
agreements generate immediate revenues and a long-term interest in
products being developed through milestone and royalty payments.
GSK recently confirmed successful delivery on the first project
carried out by EvoGenix under their collaboration agreement.
EvoGenix has also used its technology strengths to access and
develop a number of internally-owned products in the areas of
cancer, bone loss and respiratory infection. Its general intention
is to out-license these products at an early stage to meet
strategic opportunities in the sector, with selected products
advanced internally through clinical testing. The first such
product is due to commence development for the clinic at the end of
2007. More information on the company is available at www.evogenix.com.
Merged company
A focus on the antibody sector positions the new company in what is
currently the most dynamic area of the pharmaceutical industry.
Antibodies have already proved their value in opening up entirely
new avenues for treatment in cancer and inflammatory diseases like
arthritis. Many antibody products reaching the market have gone on
to achieve blockbuster status – sales of greater than US$1
billion annually. More than 50% of the growth in all drug sales
over the next 5 years is expected to come from new and existing
antibody products. Antibodies have finally delivered on their
promise as “magic bullets” and the new company is
poised to be an international leader in the field.
Peptech’s lead compound, PN0621, is expected to commence
clinical testing in this quarter, with a further two products from
the EvoGenix pipeline ready for clinical development next year.
With these key projects progressing through clinical development, a
continuation of the EvoGenix technology collaboration strategy and
a portfolio of emerging products, the new company has an
outstanding platform from which to deliver increasing shareholder
value in the short and long term.Citigroup are financial advisors
to Peptech and ABN AMRO Morgans are financial advisors to
EvoGenix.Peptech and EvoGenix will file a detailed investor
presentation with the ASX, which can be viewed on the company
websites.
For further details contact:
Peptech Limited
Dr John Chiplin
Chief Executive Officer
T: + 61 2 9870 8788
E: jchiplin@peptech.com
EvoGenix Limited
Dr Merilyn Sleigh
Chief Executive Officer
T: +61 2 8257 3393
M: 0412 766 790
E: m.sleigh@evogenix.com.au
Media relations:
Rebecca Piercy
Buchan Consulting
T: +61 2 9237 2800
Mobile: 0422 916 422
E: rpiercy@bcg.com.au
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