NitroMed, Inc and Archemix Corp, a privately-held biopharmaceutical company working to develop aptamer-based therapeutics, announced that they have entered into a definitive merger agreement under which Archemix will merge with NitroMed in an all-stock transaction.
Under the terms of the merger agreement, NitroMed will issue new shares of its common stock to Archemix stockholders based on an exchange ratio to be determined prior to the closing of the transaction. Under the exchange ratio formula defined in the merger agreement, the former Archemix stockholders are expected to own approximately 70 per cent of the combined company, and the former NitroMed stockholders are expected to own approximately 30 per cent of the combined company, each on a fully-diluted basis. This ratio is subject to potential adjustments as described in the merger agreement. The name of the company will be changed to Archemix Corp. and will be headquartered at Archemix's offices in Cambridge, Massachusetts. The merger is subject to approval by Archemix's and NitroMed's stockholders and consummation of the previously-announced sale of NitroMed's BiDil assets and other customary closing conditions.
Archemix is engaged in internal development of aptamer therapeutics in the area of hematologic diseases, and has out-licensed its technology to others to develop their own aptamer therapeutics in other areas. Aptamers are synthetically-derived oligonucleotides that bind to proteins with high specificity and affinity and have been shown to provide many of the advantages of oligonucleotides and monoclonal antibodies. Archemix's most advanced proprietary candidate, ARC1779, is in phase-2 clinical development to treat patients suffering from a family of rare blood disorders known as thrombotic microangiopathies, or TMA. A second Archemix proprietary product is scheduled to enter the clinic in mid-2009. In addition, Archemix has licensed its intellectual property to third parties to develop their own aptamer product candidates. Currently, Archemix licensees are evaluating five different aptamer product candidates in human clinical trials; two in phase-2 and three in phase-1. Archemix has additional partnerships with several pharmaceutical and biotechnology companies, including Merck Serono, Pfizer, Takeda, Eli Lilly and Isis Pharmaceuticals.
Assuming consummation of the previously-announced sale of NitroMed's BiDil assets, it is estimated that cash and cash equivalents for the combined company will be approximately $50-60 million at closing.
"We view this merger as the critical second step, following the announced sale of the BiDil business, in our goal of creating value for our shareholders," said Kenneth M Bate, president and CEO of NitroMed. "We believe that the combination of NitroMed and Archemix will provide NitroMed's stockholders with a company that has an exciting technology platform, proprietary products in development, business development opportunities and a solid financial foundation."
"We believe that Archemix's aptamer technology is a promising platform for novel drug discovery and development and it has led to a robust pipeline of potentially valuable therapeutics," said Errol DeSouza, president and CEO of Archemix. "We are pursuing a strategy that enables us to develop a proprietary pipeline as well as develop a network of partnerships with leading pharmaceutical companies. We are very pleased to enter into this transaction, as we believe it will allow us to vigorously pursue this strategy and benefit shareholders of both companies."
The merger will take the form of a stock-for-stock merger intended to qualify as a tax-free reorganization. Under the terms of the agreement, all outstanding shares of Archemix's common stock and preferred stock will be exchanged for shares of NitroMed's common stock and all outstanding Archemix options and warrants will be assumed by NitroMed and become options and warrants to acquire NitroMed's common stock.
NitroMed expects to file a Registration Statement on Form S-4 and related joint proxy statement/prospectus with the SEC. Depending on the timing of filing and effectiveness of the Form S-4, the companies currently target the closing of the merger in the second quarter of 2009. In connection with the transaction, NitroMed intends to apply for re-listing of the combined company's shares on NASDAQ to trade under the symbol 'ARCH'. NitroMed plans to institute a reverse stock split, subject to stockholder approval, to comply with NASDAQ's listing requirements at the time of the merger.
Cowen and Company, LLC is acting as exclusive financial advisor and Wilmer Cutler Pickering Hale and Dorr LLP is acting as legal counsel to NitroMed. Merrill Lynch & Co. is acting as exclusive financial advisor and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC is acting as legal counsel to Archemix.
NitroMed of Lexington, Massachusetts is the maker of BiDil(R) (isosorbide dinitrate/hydralazine hydrochloride), an orally administered medicine available in the United States for the treatment of heart failure in self-identified black patients.
Archemix is a biotechnology company focused on discovering, developing and commercializing aptamer therapeutics.