Radiopharmaceutical developer Cytogen moved to broaden its position in the oncology market today, announcing an agreement to acquire MRI contrast agent firm Advanced Magnetics in a stock swap valued at $60 million.
In announcing the deal, Princeton, NJ-based Cytogen cited several potential benefits. For one, Cytogen believes that Advanced Magnetics' Combidex work-in-progress MRI contrast agent will be a good complement to Cytogen's ProstaScint prostate cancer product and OncoScint CR/OV ovarian and colorectal cancer radiopharmaceuticals.
Combidex, targeted for the detection of lymph node metastases, is moving closer to Food and Drug Administration clearance. Last month, the FDA issued an approvable letter for Combidex.
If the acquisition goes through, the combined companies plan to utilize Cytogen's oncology sales and marketing organization to support the planned launch of Combidex in the first half of 2001.
Cytogen also highlighted Advanced Magnetics' favorable cash position, which includes $19.5 million in cash and marketable securities. Cytogen hopes to use the cash to secure development resources and support other areas of the combined business, including prostate cancer diagnostics and therapeutics based on Cytogen's prostate-specific membrane antigen (PSMA) technology and its AxCell Biosciences proteomics subsidiary.
In addition, Cytogen would receive Advanced Magnetics' iron oxide-based imaging technology, as well as the Cambridge, MA-based company's manufacturing facility. Cytogen will take advantage of the Cambridge facility for fill, finish, and distribution of ProstaScint and OncoScint CR/OV, according to the Cytogen. Cytogen would also garner a patent portfolio consisting of 25 U.S. patents and additional U.S. and foreign pending patent applications.
The combined development teams of Cytogen and Advanced Magnetics will work to secure regulatory approvals and accelerate the commercial introduction of product candidates in the R&D pipeline, including Advanced Magnetics' Code 7228 next-generation imaging agent. Code 7228, developed for oncology and magnetic resonance angiography (MRA) applications, is scheduled to enter phase II clinical trials later this year.
Under terms of the acquisition agreement, Advanced Magnetics shareholders will receive $60 million in shares of Cytogen common stock. Each outstanding Advanced Magnetics common share will be converted into $8.75 of Cytogen common shares, subject to a collar on the price of Cytogen common stock ranging from $8.55 to $11.56. The transaction is subject to approval by Advanced Magnetics' shareholders and is expected to close in the third quarter of 2000.
By Erik L. RidleyAuntMinnie.com staff writer
July 10, 2000
Related Reading
Cytogen applies for European clearance for ProstaScint, June 26, 2000.
Advanced Magnetics agent gets approvable letter, June 22, 2000.Advanced Magnetics revenues drop sharply in Q2, April 21, 2000.
ProstaScint added to NCCN guidelines, March 20, 2000.
Cytogen adds to executive lineup, February 11, 2000.
Cytogen's ProstaScint could aid brachytherapy, December 3, 1999.
Let AuntMinnie.com know what you think about this story.
Copyright © 2000 AuntMinnie.com
