Archemix will merge with NitroMed in an all-stock transaction. The merger is subject to approval by the companies’ stockholders and consummation of the previously announced sale of NitroMed’s BiDil® assets and other customary closing conditions.
Under the terms of the merger agreement, NitroMed will issue new shares of its common stock to Archemix stockholders based on an exchange ratio—determined prior to the closing of the transaction. Under the exchange ratio formula defined in the merger agreement and subject to possible adjustments, the former Archemix stockholders are expected to own approximately 70% of the combined company, and the former NitroMed stockholders are expected to own approximately 30% of the combined company, each on a fully diluted basis.
“We view this merger as the critical second step, following the announced sale of the BiDil business, in our goal of creating value for our shareholders,” said Kenneth M. Bate, president and CEO of NitroMed. In October, NitroMed entered into a purchase and sale agreement with JHP Pharmaceuticals, which will acquire substantially all of the assets related to NitroMed's BiDil. The transaction is expected to complete in early 2009. By that time, NitroMed will have received $24.5 million in cash, subject to an accounts receivable adjustment, plus up to an additional $1.8 million for closing date inventory.
Assuming consummation of the sale of the BiDil assets, it is estimated that cash and cash equivalents for the combined company will be approximately $50–60 million at closing, according to the companies.
BiDil (isosorbide dinitrate/hydralazine hydrochloride) is an orally administered medicine approved in the U.S. for the treatment of heart failure in self-identified black patients as an adjunct to current standard therapies. BiDil was approved by the FDA in 2005.