MGI Pharma Inc, an oncology-focused biopharmaceutical company, and Aesgen, Inc, a privately held company focused on treating side effects associated with cancer treatments, have signed a definitive merger agreement under which MGI Pharma will acquire all outstanding equity of Aesgen for $32 million in cash.
Earlier, MGI Pharma had signed a definitive merger agreement with zycos under which MGI Pharma would acquire Zycos for $50 million in cash. This transaction, which had been approved by the boards of directors of both companies, was subject to approval by the stockholders of Zycos.
According to a release, MGI Pharma also be obligated to make performance milestone payments of $33 million upon regulatory approval and $25 million if sales exceed $50 million in the second year following product launch. In addition, MGI Pharma will pay a 5 per cent royalty on product sales, including sales of Aesgen's Saforis, a product candidate in development for treatment of oral mucositis. This acquisition, which has been approved by the boards of directors of both companies, is subject to approval by the shareholders of Aesgen. MGI Pharma and Aesgen expect the transaction to close during 2004. Under the agreement, key Aesgen management personnel will assume new roles within the MGI Pharma organization.
"This transaction is an excellent strategic fit for MGI Pharma that further strengthens our oncology supportive care franchise," said Lonnie Moulder, president and chief executive officer of MGI Pharma. "With the addition of Saforis, we now have a phase 3 product candidate that may help manage the debilitating side effects of oral mucositis that patients often experience during chemotherapy," added Lonnie.