AMAG Pharmaceuticals and Allos Therapeutics have agreed on a definitive stock-based merger that will result in AMAG stockholders owning about 61% of the combined entity, and Allos shareholders holding the remaining 39%. Under terms of the transaction, which has a total equity value of about $686 million, Allos shareholders will receive 0.1282 shares of AMAG common stock for each of their Allos shares. The combined entity hopes to make annual synergy-based cost-savings of about $55–$60 million, mostly in the first fiscal year after the merger is completed. The firms had combined unaudited cash, cash equivalents, and investments totaling $373.7 million as of June 30.
AMAG’s lead commercial product, Feraheme® (ferumoxytol injection), is marketed in the U.S. for the treatment of iron deficiency anemia (IDA) in adults with chronic kidney disease. The product is also under regulatory review in the EU, Canada, and Switzerland for the treatment of IDA in adult chronic kidney disease patients. Rulings in Europe and Canada are expected during 2011, and in Switzerland during 2012. Feraheme is separatey being evaluated through a global registrational program for a broad IDA indication. AMAG says estimates suggest the overall U.S. non-dialysis IV iron market is estimated at some $400 million.
Allos’ Folotyn® (pralatrexate injection) is indicated for use as a single agent in the treatment of patients with relapsed or refractory peripheral T-cell lymphoma (PTCL). Regulatory review in the EU is ongoing, and a decision is expected in early 2012. Folotyn is separately being evaluated in two global Phase III trials in the first-line treatment for both PTCL and relapsed or refractory cutaneous T-cell lymphoma. Allos is in addition evaluating prelatrexate either as monotherapy or combination therapy for a range of cancers, including B-cell non-Hodgkin lymphoma, non-small cell lung cancer, bladder cancer, and breast cancer. The firm estimates that the total U.S. market for the second line PTCL therapy indication alone is about $400 million.
In addition to its revenues earned from products currently approved and marketed in the U.S., the combined entity also has the potential to earn another $530.5 million in milestones and future sales royalties from established non-U.S. development and commercialization collaborations, including deals with Takeda and 3Sbio for Feraheme, and with Mundipharma for Folotyn.