Peptech and fellow Australian firm Evogenix have announced plans to merge in a move that the firms say will create an “antibody powerhouse” and form one of the country’s largest biotechnology companies.
Under the terms of the deal, Peptech will acquire 100% of EvoGenix for a mixture of cash and shares which values the latter at A$156 million (approximately $130 million) and represents a 33% premium to EvoGenix’s last traded price on the Australian Stock Exchange last Friday.
The new entity, which will be renamed, will focus on developing
significant antibody/protein-based franchises for the treatment of inflammatory diseases, bone disease and cancer which “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 firms said. They also claim to have “an exceptionally strong balance sheet,” to fast-track product development, having been boosted by the more than A$150 million Peptide received from the sale of its share in UK company Domantis to GlaxoSmithKline.
In addition, the combined company will receive ongoing revenue streams from Abbott Laboratories and Johnson & Johnson in relation to their respective blockbuster antibody anti-tumour necrosis factor drugs Humira (adalimumab) and Remicade (infliximab). Peptech’s own next generation anti-TNF drug will enter the clinic this month.
The merged company will be led by Peptech chief executive, John Chiplin, who said that the transaction “creates a combined entity which is poised to be a major player on the worldwide antibody stage.” He added that “we have genuinely built critical mass in this Australian merger to compete aggressively in the fastest growing sector of the international human therapeutic market,” noting that EvoGenix has “revenue-generating technology with proven capabilities and linkages that blend ideally with our own product development activities.”
The merger comes after Peptech stoked speculation about a possible private equity takeover in March, when it engaged broker Citigroup to advise on investment options. Dr Chiplin said that the deal shows that Peptech had "now moved on", noting that “we weren't going to sit around just waiting or hoping to see if a bid would come in." Three years ago, Peptech was all set to merge with another Australian firm Agenix after the latter firm was prevented from seeing documents relating to a patent dispute Peptech was having with J&J over Remicade.