MGI PHARMA To Acquire Guilford Pharmaceuticals
Minneapolis, MN - MGI PHARMA, INC. an oncology and acute care focused biopharmaceutical company, and Guilford Pharmaceuticals Inc., a biopharmaceutical company engaged in the research, development and commercialization of drugs that target the acute care market, recently announced that they have signed a definitive merger agreement dated July 20, 2005, providing for the acquisition of Guilford Pharmaceuticals Inc. by MGI PHARMA. MGI PHARMA intends to build a leading biopharmaceutical company focused in oncology and acute care through a business development strategy that broadens both its portfolio of commercial products and pipeline of product candidates. This transaction further strengthens MGI PHARMA's commercial infrastructure and product development franchises in oncology and acute care, adds to an already robust pipeline of product candidates, and will help drive long-term financial growth of the Company.
MGI PHARMA will acquire all of the outstanding shares of Guilford for $3.75 per share in a taxable merger. This consideration, which represents a premium of 55.6% over Guilford's closing price on July 20, 2005, consists of a fractional share of MGI PHARMA common stock valued at $2.625 and $1.125 in cash. The stock portion of this consideration is subject to a 15% collar. Based upon the closing price of MGI PHARMA stock on July 20, 2005, MGI PHARMA expects to issue approximately 4.5 million shares as part of this transaction.
"This strategic transaction significantly advances our efforts in building an acute care business and enhances our existing oncology franchise as we create a leading biopharmaceutical company," said Lonnie Moulder, president and chief executive officer of MGI PHARMA. "In addition to a talented group of people, this transaction brings several important assets to MGI PHARMA, including Aquavan(R) injection, a late-stage, acute care product candidate for procedural sedation that, upon approval, will be an excellent companion product to Aloxi(R) injection for PONV. Gliadel(R) wafer, a marketed product for high grade malignant gliomas complements our current oncology franchise and provides an immediate revenue opportunity, and the Guilford field organization, with established relationships in acute care, will immediately be leveraged to advance market penetration of Aloxi injection in CINV and, upon approval, Dacogen(TM) injection."
"Moreover, the addition of two early stage programs, NAALADase inhibitors for chemotherapy-induced neuropathy, and PARP inhibitors, as chemotherapy or radiation therapy sensitizers, fit strategically into our oncology development pipeline," continued Mr. Moulder. "I look forward to welcoming and working with the Guilford team to advance MGI PHARMA's position as a leading biopharmaceutical company with franchises in oncology and acute care."
"A strategic merger with MGI PHARMA offers significant advantages for Guilford's shareholders and employees," commented Dean J. Mitchell, president and chief executive officer of Guilford. "First, it provides the resources required to develop value from the portfolio, while avoiding additional dilution to our shareholders. Second, the increased development and commercialization scale will allow maximization of the market potential of Aquavan injection and Gliadel wafer. Finally, an expanded commercial portfolio of three promoted products, with a fourth product, Dacogen injection, awaiting regulatory action, combined with an extensive late-stage development and preclinical pipeline will drive long term financial growth and help accelerate MGI PHARMA's transition to a leading biopharmaceutical company. We look forward to becoming part of the MGI PHARMA team and sharing in this success."
SOURCE: MGI PHARMA, INC.