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Cephalon to acquire Australian bio firm, Arana Therapeutics

Frazer, PennsylvaniaSaturday, February 28, 2009, 08:00 Hrs  [IST]

Cephalon, Inc announced that its wholly-owned subsidiary, Cephalon International Holdings, Inc, intends to make a takeover offer for Arana Therapeutics Limited. Arana has a pipeline of biologic compounds for inflammatory diseases and cancer at various stages of discovery and development. The offer has the support of the Arana independent directors and will be recommended to Arana shareholders in the absence of a superior proposal. Under its bid, Cephalon intends to offer A$1.40 cash for each Arana ordinary share cum dividends and other rights. The total offer value is approximately A$318 million (US$207 million). The offer price represents a 70 per cent premium to Arana's 90-day volume weighted average price and a 69 per cent premium to the closing price on February 25, 2009, the last trading day prior to this announcement. If Cephalon obtains a relevant interest in 90 per cent of Arana shares and the offer conditions are satisfied or waived, Cephalon will increase its offer price by five Australian cents per share. This offer price increase will be payable to all shareholders no matter when their acceptances are received. In these circumstances accepting Arana shareholders will receive A$1.45 per share. Cephalon intends to fund the offer price using a portion of its existing cash balance. "Cephalon is offering Arana shareholders the opportunity to de-risk their investment portfolios by taking cash for their shares at a time when cash provides certainty and stability," said Kevin Buchi, chief financial officer at Cephalon. "We are better equipped to take Arana's lead compound, ART621, through clinical development and, pending the success of clinical trials, to international markets." To support its bid, Cephalon has acquired a shareholding in Arana, representing an ownership position of approximately 19.9 per cent of the total issued share capital of Arana. The purchase price of the shares was A$1.40 per share. Cephalon has acquired this stake from Arana's two largest shareholders, Start-up Australia Ventures Pty Ltd and Rockwell Securities Limited. Cephalon's offer will be subject to certain basic conditions (outlined in Appendix A), including a 50.1 percent minimum acceptance condition. Cephalon is well advanced in the preparation of its Bidder's Statement, and expects the offer will be open for acceptance by mid-March. Arana is a biopharmaceutical company focused on developing next generation antibody based drugs that will improve the lives of patients with inflammatory diseases and cancer. The company's lead compound, ART621, is a new generation tumour necrosis factor (TNF ) alpha blocker in development for patients with inflammatory diseases. "Arana would bolster our burgeoning inflammatory disease pipeline as well as our oncology pipeline," said Frank Baldino, chairman and CEO of Cephalon. "Arana has an established protein engineering technology platform that transforms proteins, including antibodies, into potent drug candidates. Its lead candidate, ART621, is a domain antibody currently in phase-II trials for both psoriasis and rheumatoid arthritis. TNFs are well established targets with a high probability of success." Over the last 4 months, Cephalon has completed deals designed to help build a portfolio of products targeted to inflammatory diseases. Earlier this month, Cephalon acquired exclusive worldwide rights to the ImmuPharma investigational compound, Lupuzor, which is in development for the treatment of systemic lupus erythematosus. In January, the company announced an option to acquire privately-held Ception Therapeutics, Inc., whose lead humanized monoclonal antibody compound, reslizumab, is in development for the treatment of paediatric eosinophilic esophagitis. Founded in 1987, Cephalon is an international biopharmaceutical company dedicated to the discovery, development, and commercialization of many unique products in four core therapeutic areas: central nervous system, inflammatory diseases, pain, and oncology.

 
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