On April 23, 2012 Nabi Biopharmaceuticals (Nasdaq:NABI) reported plans to merge with Biota Holdings Limited (ASX:BTA), a Melbourne, Australia company (Press release, Nabi Biopharmaceuticals, APR 23, 2012, View Source [SID1234523067]). The execution of the merger implementation agreement will form a combined company to be named Biota Pharmaceuticals, Inc. Biota Pharmaceuticals will be listed on NASDAQ and headquartered in the United States. The merger will provide to Nabi’s shareholders 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. Biota’s move to the United States is designed to achieve better value recognition and liquidity through a stronger U.S. biotechnology shareholder base.
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Following the closing of the merger, Biota Pharmaceuticals, Inc. will have three royalty generating products, Relenza, Inavir and potentially PhosLyra; two clinical programs, vapendavir (a phase III-ready human rhinovirus program), as well as a US$231 million contract with BARDA for the advanced development, in the US, of laninamivir (a long acting anti-influenza neuraminidase inhibitor). In addition, the combined company will have an interest in NicVAX and several pre-clinical programs, including respiratory syncytial virus (RSV), hepatitis C (HCV-NN), broad spectrum antibiotic targeting gyrase (GYR), as well as over US$100 million in cash with which to develop its program pipeline.
"This merger is an exciting opportunity for Nabi’s shareholders," said Dr. Raafat Fahim, President and CEO of Nabi. "It will trigger the distribution of significant cash to current Nabi shareholders, as well as enable their participation in the growth opportunity of the combined company, which includes royalty generating products and a rich pipeline. In addition, it preserves for Nabi’s current shareholders the possibility of realizing potential future value from NicVAX."
Biota Chairman, Jim Fox, commented, "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. We believe this is a necessary step to increase our options for the development and commercialization of our product portfolio, ultimately generating significantly greater value recognition of our product portfolio for our shareholders."
The merger and related matters will require approval of the Biota and Nabi shareholders.
Key elements of the merger implementation agreement are:
Nabi will acquire all of the outstanding ordinary shares in Biota in exchange for newly issued shares of Nabi common stock.
After the merger, Nabi will be renamed, "Biota Pharmaceuticals, Inc." and remain a NASDAQ listed company, while Biota will be de-listed from the ASX.
Nabi’s assets at the closing of the merger will include US$54 million in cash, a right to receive royalties from a marketed product (PhosLyra) and an interest in NicVAX vaccines.
Nabi plans to return to its stockholders its remaining cash in excess of the US$54 million required to be held by Nabi at closing after satisfying outstanding liabilities. Such distribution is expected to take the form of a dividend, return of capital and/or a repurchase of outstanding shares of Nabi common stock through an issuer tender offer, or a combination. Nabi’s board of directors has not made a determination at this time regarding the form or timing of such distribution but expects to make these determinations prior to the public distribution to the Nabi shareholders of its proxy statement for the Nabi shareholders meeting at which certain matters related to the merger will be considered.
Nabi’s Board also intends to distribute contingent value right providing payment rights arising from future sale, transfer, license or similar transactions involving NicVAX.
Immediately following the closing of the merger, the shares of Nabi common stock issued to former Biota shareholders will represent approximately 74% of the outstanding common stock of the combined company and shares of Nabi common stock held by current Nabi shareholders will represent approximately 26% of the outstanding common stock of the combined company.
Immediately following the closing of the merger, the board of directors of the combined company will consist of six current Biota Directors and two current Nabi Directors. Also, Biota’s current CEO and CFO will serve as the CEO and CFO, respectively, of the combined company and additional US-based executives will be appointed.
In conjunction with the merger, Nabi plans to seek shareholder approval of:
(1) certain amendments to its certificate of incorporation to increase the authorized number of shares of common stock to 200,000,000 principally to allow for the issuance of new shares in the merger and to change the name of the company to "Biota Pharmaceuticals, Inc.";
(2) the issuance of new shares of Nabi common stock to the Biota shareholders in connection with the merger as required by NASDAQ; and
(3) a reverse stock split for ratios ranging from four-to-one to eight-to-one, although a final decision has not been made on whether to implement the reverse split or the exact split ratio (collectively, the "shareholder proposals").
The Board of Directors of both Nabi and Biota consider the merger and the related transactions to be advisable and fair to, and in the best interests of, their respective shareholders. Nabi’s Board of Directors unanimously recommends that Nabi’s shareholders approve the shareholder proposals at the shareholders meeting at which such matters will be considered.
Nabi expects to close the merger in the third quarter of 2012 after receipt of approval by both Nabi’s and Biota’s shareholders and satisfaction of customary closing conditions and regulatory approvals, including Australian courts.
Piper Jaffray & Co. and Houlihan Lokey are acting as financial advisers, Hogan Lovells US LLP is acting as US legal adviser and Clayton Utz is acting as Australia legal advisor to Nabi in the transaction.
Merger Announcement Conference Call and Webcast Information
The Company will host a live webcast at 8:30 am EST on Monday, April 23, 2012 to discuss the merger.
The webcast can be accessed at:
View Source;c=100445&eventID=4762826.
(Due to the length of this URL, it may be necessary to copy and paste this hyperlink into your browser. Remove the space if one exists.) or via the Nabi Biopharmaceuticals website at View Source
If you do not have Internet access, the U.S./Canada call-in number is 866-770-7120 and the international call-in number is 617-213-8065. The passcode is 12700822. An audio replay will be available for U.S./Canada callers at 888-286-8010 and for international callers at 617-801-6888. The replay passcode is 94859261. An audio replay of this call will be available through April 30, 2012.
The press release and an archived version of the webcast will be available on the company’s website at View Source