Australia's Biota Holdings is packing up and heading across the Pacific to move in with US group Nabi Biopharmaceuticals, forming a new company called Biota Pharmaceuticals.

The companies have announced their intention to merge to create a new group with an estimated value of around $224 million (according to the Wall Street Journal), which will be housed in the US and listed on the NASDAQ stock exchange.

Explaining the strategy behind the deal, Biota said its move to the US will achieve "better value recognition and liquidity through a stronger US base".

"A NASDAQ listing provides Biota with access to the largest healthcare capital market in the world and will enable us to transform our business model to one which can deliver significantly higher value than the royalty-only model we have historically pursued," noted Biota Chairman Jim Fox. 

On the other side of the fence, Nabi says the merger will provide shareholders with "the opportunity to participate in the potential growth of the combined company, return of significant cash, as well as a contingent value right providing payment rights arising from future sale, transfer, license or similar transactions involving NicVAX".

Under the terms of the deal, Nabi intends to acquire all of the outstanding ordinary shares in Biota in exchange for newly issued shares of Nabi common stock. After completion of the deal, current Biota shareholders will own around 74% of the new group while Nabi shareholders will own around 26%, the companies said.

Three products

Biota Pharmaceuticals will have three royalty generating products on its books: the antivirals Relenza (zanamivir) and Inavir, and potentially the phosphate binder PhosLyra (calcium acetate).

In addition, the firm will have (Biota's) $231 million contract from the US Office of Biomedical Advanced Research and Development Authority to develop antivirals, various clinical and preclinical programmes, an interest in NicVAX (Nabi's nicotine conjugate vaccine for the treatment of nicotine addiction and prevention of smoking relapse), and over $100 million in cash with which to develop its program pipeline.

The deal, which is subject to customary closing conditions and regulatory approvals, is expected to close by the end of September this year.