Ariad Pharmaceuticals is buying the 20% of Ariad Gene Therapeutics (AGTI) that it doesn’t already own for an equity value of just over $6 million. “Upon the consummation of this merger, Ariad is poised to realize all of the potential future economic benefit from deforolimus and other assets previously owned by AGTI,” notes Sandford D. Smith, vice chairman of the Ariad board.
Deforolimus is being developed with Merk & Co. as an anticancer agent. The firms inked an agreement covering this compound in July 2007. At the time, Ariad received $75 million and expects another $30 million in milestones or so by the end of this year, according to Maria Cantor, vp of corporate communications and investor relations.
The milestone fees include $15 million, which the company received at the start of a Phase II trial in breast cancer, $2.5 million for patient enrollment in the Phase II endometrial cancer study, and $12.5 million for the beginning of a Phase II program in prostate cancer. The most advanced program is in Phase III for sarcomas. Cantor says that data is expected by the end of next year.
Under the terms of the merger agreement, each outstanding share of AGTI common stock owned by AGTI's minority stockholders will be converted into the right to receive two shares of Ariad’s common stock. A total of 2,252,128 shares of common stock will be issued, representing approximately 3.1% of the outstanding common stock.