Myriad Pharmaceuticals Inc agreed to buy Javelin Pharmaceuticals Inc in an all-stock deal worth about $96 million, snapping up Javelin's lead post-operative pain drug, Dyloject.
Javelin stockholders will receive 0.282 Myriad shares for each share held, translating to $1.50 per Javelin share, or a 22 percent premium, based on Thursday closings.
However, Myriad shares were trading down 9 percent at $4.84 Friday morning on Nasdaq, making the offer worth about $1.36 a Javelin share.
Javelin shares were trading up 10 percent at $1.35 on the American Stock Exchange.
"Within a few years from launch, Dyloject's revenues should significantly contribute to funding development of our growing pipeline of products," Myriad said on a conference call Friday.
If the drug is approved by U.S. health regulators, both the companies project Dyloject to generate worldwide sales of more than $300 million a year.
"Myriad has the financial and commercial resources to successfully launch Dyloject," Javelin Chief Executive Martin Driscoll on the call.
As of Sept. 30, Myriad, which was spun-off from Myriad Genetics Inc, had cash, cash equivalents and marketable securities of more than $180 million.
Biotechnology Company Myriad will pay up to $6 million in interim financing to fund Javelin's operating activities before the merger closes, which is expected to occur during the first quarter of 2010.
Under the deal terms, Javelin shareholders would own about 41 percent of the combined company, but that could increase to 45 percent depending on the timing of approval for Dyloject.
After the closing, Myriad's board of directors may be expanded to eight members, including up to two members to be nominated by Javelin, it said in a statement.
Javelin had about 63.9 million shares outstanding as of Nov. 6, according to the data.