The Medicines Company has entered into a merger agreement with Targanta Therapeutics Corporation under which, The Medicines Company has agreed to commence a tender offer to acquire cent per cent of Targanta's outstanding shares.
"The Medicines Company is pleased to announce our agreement to add the assets and capabilities of Targanta. The addition of Targanta's oritavancin, a late stage product, will be another step toward execution of our strategic plan to become a global leader in critical care medicine," said Clive Meanwell, chairman and chief executive officer of The Medicines Company. "Oritavancin has the potential to provide important patient outcome and economic advantages for hospitals. The growing hospital market for gram positive infections in the US alone reached $1.1 billion in 2007. We believe that oritavancin can become an important anti-infective for serious infections involving difficult-to-treat bacteria in difficult-to-treat hospitalized patients. Many of those critically ill patients are the same patients treated with our existing products."
Under the terms of the merger agreement, Targanta shareholders will receive $2.00 in cash up front for each common share tendered, or approximately $42 million. Targanta shareholders may also be entitled to receive additional contingent cash payments upon the achievement of specified regulatory and commercial milestones within agreed upon time periods. Like upon FDA approval of a NDA for oritavancin for cSSSI (complicated skin and skin structure infections) using a single dose infusion, $1.20 per share. If FDA approval does not include single dose infusion labelling, this payment is reduced to $0.50 per share. Upon EMEA approval of a MAA for oritavancin for cSSSI during 2009, $1.00 per share. If EMEA approval occurs later, this payment is reduced to $0.75 per share if it occurs prior to June 30, 2010 or if later, $0.50 per share. On achievement of worldwide net sales adding up to a total of $400 million or more in the aggregate over four consecutive quarters, a one-time payment of $2.35 per share.
The transaction has been approved by the boards of directors of both companies, and Targanta's Board of Directors has recommended that Targanta's shareholders tender their shares into the tender offer, adopt the merger agreement and approve the merger.
"We believe that this transaction can create significant value for our shareholders and further expand our portfolio of critical care products. It adds a late stage product, with global rights, and the potential for near-term revenue, and could contribute significantly to our long-term growth. Oritavancin is a well characterized phase-3 asset. We believe the deal terms reflect a balanced investment to expand our product portfolio and we agreed to pay for the transaction with cash to avoid share dilution. The addition of staged payments provides Targanta shareholders additional value if milestones are achieved and mitigates risk for The Medicines Company," said Glenn Sblendorio, EVP & chief financial officer.
Oritavancin is a novel, semi-synthetic lipoglycopeptide antibiotic candidate with potent bactericidal (killing) activity against a broad spectrum of gram-positive bacteria.
Targanta Therapeutics Corporation is a biopharmaceutical company focused on developing and commercializing innovative antibiotics to treat serious infections in the hospital and other institutional settings.
The Medicines Company is focused on advancing the treatment of critical care patients through the delivery of innovative, cost-effective medicines
to the worldwide hospital marketplace.