Allos Therapeutics and AMAG Pharmaceuticals have decided to nix their previously reported merger agreement after AMAG stockholders voted against it. The $686 million stock-based deal would have seen AMAG stockholders owning about 61% of the combined entity.
AMAG sells Feraheme® in the U.S. for the treatment of iron deficiency anemia (IDA) in adults with chronic kidney disease. Allos sells Folotyn® as a treatment for relapsed or refractory peripheral T-cell lymphoma (PTCL).
First announced on July 19 and amended on August 8, AMAG had said that a merger with Allos would result in annual synergy-based cost savings of about $55–$60 million, mostly in the first fiscal year post merger completion. The acquisition, however, came under heavy criticism from AMAG shareholders. In fact, on August 3, AMAG’s long-term investor MSMB Capital Management made an unsolicited offer to buy the firm outright for an aggregate of $378 million to stop the merger with Allos.
Separately, a majority of Allos’ stockholders voted in favor of the adoption of the merger agreement at a meeting held October 21. “The Board and shareholders of Allos supported the proposed merger with AMAG based on the strategic rationale, anticipated operating synergies, and potential for future growth of the core brands,” remarks Paul L. Berns, president and CEO of Allos.
In accordance with the terms of the merger agreement with Allos, AMAG will terminate the agreement and pay Allos $2 million to cover expenses Allos has incurred related to the proposed transaction.
AMAG’s Feraheme is marketed in the U.S. and is under regulatory review in the EU, Canada, and Switzerland for the treatment of IDA in adult chronic kidney disease patients. Allos’ Folotyn is indicated for use as a single agent in the treatment of patients with relapsed or refractory 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.