Trubion Pharma’s stock value has soared on news that it is to be acquired by Emergent BioSolutions, in a move that should help accelerate the development of the former’s products while broadening the latter’s portfolio.

The group’s shares eventually closed up $1.50 at $4.50 on Friday following a day of frenzied trading, after Trubion said it had agreed to the deal, under which Emergent will pay an upfront fee of around $96.8 million to buy the firm.

Trubion’s shareholders will also receive one Contingent Value Right per share, creating a further potential revenue stream of future cash payments worth a total of $38.7 million based upon the attainment of certain milestones, such as the initiation of the first Phase III clinical study in oncology indication for TRU-01 (worth $15 million) and the first Phase II clinical study for TRU-016 ($1.75 million).

Explaining the strategy behind the move, Fuad El-Hibri, chairman of the board of directors and chief executive officer of Emergent, said the acquisition strengthens the firm’s biologics capabilities by diversifying its product pipeline beyond infectious diseases as well as broadening its monoclonal antibody therapeutic capabilities.

Trubion currently has two clinical-stage product candidates focused on the high-growth targeted disease areas of oncology and autoimmunity, and also offers novel platforms for developing additional innovative therapeutic candidates.

Adding value
“Emergent’s stable vaccine franchise, substantial capital resources, and expertise in biologics manufacturing and product development combined with Trubion's world-class therapeutic platform technologies and clinical-stage development programs should translate into significant value over the near and long term,” he said.

On the other side of the coin, the deal for Trubion means added financial muscle and expertise to help speed the development of its portfolio, particularly its innovative Small Modular Immunopharmaceutic and SCORPION protein therapeutic product candidates and technologies, noted the company’s executive chairman of the board of directors and acting president Steven Gillis.

Emergent said it will maintain research facilities in Seattle, Washington, which will become a therapeutics-focused product development site for the combined company, and in light of the deal has reaffirmed its annual 2010 forecast of $275-$300 million in total revenues and $40-$50 million in net income.

Plans for the deal have been OK’d by both sets of directors and the merger is expected to close by the end of the fourth quarter.