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STOCKHOLM, May 10, 2023 /PRNewswire/ — Swedish Orphan Biovitrum AB (publ) (Sobi®) (STO: SOBI) today announced that it has entered into an agreement and plan of merger with CTI BioPharma Corp. (CTI) under which Sobi has agreed to acquire CTI, a biopharmaceutical company focused on blood related cancers and rare diseases, by means of a tender offer.
The acquisition complements and further strengthens Sobi’s leading haematology franchise by adding VONJO® (pacritinib), a novel oral kinase inhibitor that inhibits JAK2, IRAK1 and ACRV1, while sparing JAK1. VONJO obtained accelerated approval by the FDA in February 2022 for treatment of adults with intermediate or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) myelofibrosis with a platelet count below 50 × 109/L.
Rationale of the acquisition and transaction in brief:
Adds VONJO, a differentiated product in the treatment of myelofibrosis, specifically addressing patients with severe thrombocytopenia, an unmet medical need.
Highly complementary to Sobi’s existing portfolio, specifically Doptelet®, expands Sobi’s leading position in rare haematology and accelerates access for patients to both therapies globally.
Both VONJO and Doptelet address rare haematological platelet disorders and are prescribed by haemato-oncologists and haematologists. The acquisition accelerates Sobi’s strategy to build a leading franchise in rare haematology.
The addition of VONJO brings a uniquely differentiated therapy, serving an unmet medical need for patients suffering from myelofibrosis.
The acquisition is expected to accelerate Sobi’s revenue growth, and to improve margins, adding a commercial-stage asset in the U.S., with the potential for further expansion globally.
Sobi to commence a cash tender offer to acquire all issued and outstanding shares of CTI for USD 9.10 per share, corresponding to a total equity value of USD 1.7 billion (approximately SEK 17.1 billion).
Fully funded through committed debt financing, up to half of which is anticipated to be refinanced through a rights issue after the closing of the acquisition, with a commitment from Investor AB to subscribe for its pro rata share of the rights issue, corresponding to approximately 34.7% of the shares to be issued in the rights issue.
“CTI represents a perfect fit for Sobi’s haematology franchise today, adding a powerful and highly differentiated new product that will make a significant difference for patients”, said Guido Oelkers President and CEO of Sobi. “There is a large unmet medical need within myelofibrosis, in particular for patients suffering from thrombocytopenia who are inadequately treated by existing medicines. The combination of the talented team at CTI, together with Sobi’s broad US and global haematology capabilities, will help get this much needed new therapy to patients faster and more effectively. The acquisition of CTI is the latest in a series of transformative transactions Sobi has conducted to build its leading rare haematology franchise.”
Financial highlights
The acquisition is expected to be highly accretive to Sobi’s revenue and margins, starting in the near-term. Revenue and cost synergies are expected from leveraging the highly complementary nature of Sobi’s existing U.S. commercial operations and global sales infrastructure in haematology and rare diseases.
Sobi has obtained committed debt financing from Bank of America and Danske Bank. Sobi anticipates that up to half of the merger consideration will be refinanced through an issuance of new ordinary shares of Sobi with preferential rights for existing shareholders of Sobi, after the closing of the acquisition.
Sobi’s main shareholder, Investor AB, has undertaken to vote in favor of the implementation of the rights issue at an extraordinary general meeting. Investor AB has also undertaken to subscribe for its pro rata share of the rights issue, corresponding to approximately 34.7% of the shares to be issued in the rights issue. A detailed time plan and the forms for the implementation of the rights issue will be announced at a later stage.
Transaction details
Under the terms of the merger agreement, Sobi, through a wholly owned, indirect subsidiary, will initiate a tender offer to acquire all the outstanding shares of CTI for a cash purchase price of USD 9.10 per share, representing a premium of 95% based on CTI’s 30-day volume-weighted average price of USD 4.67 preceding announcement of the transaction price of USD 9.10. The Board of Directors of CTI has unanimously approved the transaction and recommended that the shareholders of CTI tender their shares in the tender offer. Sobi has received an irrevocable undertaking from certain entities affiliated with BVF Partners L.P. (BVF) to tender all of their common shares, representing 6.7% of all outstanding common shares.
The closing of the tender offer will be subject to customary conditions, including the tender of shares which represent at least a majority of the total number of CTI’s outstanding common shares and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Upon the successful completion of the tender offer, Sobi would acquire any shares of CTI’s common stock not tendered through a second-step merger effected for the same per common share consideration. The transaction is expected to close in Q3 2023.
Advisors
Bank of America Europe DAC, Stockholm branch (“BofA Securities”) is acting as Sobi’s exclusive financial advisor in connection with the transaction and Latham & Watkins LLP is acting as legal advisor to Sobi on this transaction. Mannheimer Swartling is acting as legal advisor to Sobi in relation to the debt financing and rights issue.
About VONJO
VONJO is approved for the treatment of adults with intermediate- or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) myelofibrosis with a platelet count below 50 × 109/L. This indication is approved under FDA accelerated approval based on spleen volume reduction. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s). CTI is conducting the Phase 3 PACIFICA study of VONJO in patients with myelofibrosis and severe thrombocytopenia as a post-marketing requirement. For more information, please visit https://www.ctibiopharma.com.
About CTI
CTI is a commercial biopharmaceutical company focused on the development and commercialization of novel targeted therapies for blood-related cancers that offer a unique benefit to patients and their healthcare providers. CTI has one FDA-approved product, VONJO® (pacritinib), a JAK2, ACVR1, and IRAK1 inhibitor, that spares JAK1. CTI is based in Seattle, USA, and has approximately 144 employees. In 2022, CTIs revenue amounted to USD 53.9 million. For more information, please visit www.ctibiopharma.com.
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