GPC Biotech AG and Agennix, Incorporated announced that the two oncology-focused biotechnology companies have signed a Business Combination Agreement under which they propose to merge their businesses.
Under this transaction, GPC Biotech is to be merged onto a new German company, which will hold all of the shares of Agennix and a €15 million cash contribution by dievini Hopp BioTech holding GmbH & Co KG, an investment company of Dietmar Hopp, co-founder of SAP, and one of the largest shareholders of GPC Biotech. The merger combines GPC Biotech's and Agennix's oncology pipelines, including Agennix's phase 3 novel oncology therapy, talactoferrin, with the clinical development and financial resources of GPC Biotech and dievini Hopp BioTech holding.
The management board and supervisory board of GPC Biotech, as well as the board of directors of Agennix, have voted unanimously to support the proposed merger, which is subject to the approval of the shareholders' meetings of both GPC Biotech and the new company. GPC Biotech plans to submit the merger agreement to its shareholders for voting at a shareholders' meeting in the first half of 2009. The merger agreement between GPC Biotech and the new company will be subject to further closing conditions, including any necessary anti-trust clearances. The merger is expected to be completed by the end of 2009.
Bernd R. Seizinger, M.D., Ph.D., chief executive officer of GPC Biotech, said: "We are truly excited to join forces with Agennix to develop their novel approach to cancer therapy, talactoferrin, which is currently in phase 3 clinical development in non-small cell lung cancer, an area of major unmet need and the most frequent cause of cancer death. The skill set and programmes that the Agennix team brings to the combined organization is highly complementary to our own group and pipeline. Together we will be able to build a new and vital company that is focused on developing important new treatments for cancer."
Dr. Seizinger continued: "I am also very pleased with the ongoing support that Hopp through dievini Hopp BioTech holding is showing through his commitment to invest in the new company. Dievini focuses its investments on creating and building entrepreneurial and sustainable biotech organizations to foster the development of innovative new treatments for patients. This philosophy fits well with our goals for the new company. I firmly believe that this transaction is a win-win scenario for both companies that will build value for all of our shareholders."
Rick G. Barsky, chief executive officer of Agennix, said: "GPC Biotech's years of oncology development expertise, along with their public company profile and solid financial position, make this merger an excellent fit for us. We are excited about the clinical anti-tumour activity and safety profile we have seen to date with talactoferrin and are pleased to have recently started Phase 3 trials for this promising compound in non-small cell lung cancer. This transaction brings us the critical human and financial resources to accelerate the development of this important anti-cancer therapy in an area in great need of new treatments. We look forward to joining forces with the GPC Biotech team in an exciting new company."
Under the Business Combination Agreement provides that GPC Biotech will merge onto a new German company which will hold all Agennix shares and a cash contribution by dievini Hopp BioTech holding of approximately € 15 million. The agreement assumes a merger ratio resulting in an economic ownership in the new company as follows: Agennix shareholders (approximately 48.0%), GPC Biotech shareholders (approximately 39.3%), and approximately 12.7% being attributed to the capital increase by dievini Hopp BioTech holding. As part of the merger process, this ratio is subject to review by an independent, court-appointed merger auditor in Germany. The merger ratio translates into a value of €1.26 per share of GPC Biotech. Upon registration of the merger, the new company will be a publicly listed German stock corporation (AG). The new company initially will have three sites: GPC Biotech's offices in Munich, Germany and in Princeton, New Jersey, and Agennix's site in Houston, Texas.
In connection with the business combination agreement, GPC Biotech has made a $20 million (approximately €15 million) loan to Agennix in the form of a senior secured convertible promissory note, bearing an interest rate of 12% per annum, to support the funding of the clinical development of talactoferrin. Additionally, during the period prior to closing, GPC Biotech will provide clinical and regulatory support to Agennix under a separate arrangement between the companies.
Rothschild Inc. served as a financial advisor to GPC Biotech in connection with the transaction, and Lazard served as financial advisor to Agennix.