NEW YORK (Thomson Financial) - Bristol-Myers Squibb Thursday agreed to
acquire Kosan Biosciences Inc. for about $190 million. The deal values Kosan
shares at $5.50 each, a premium of about 233% from the stock's close on
Wednesday at $1.65.
The projected value of the transaction reflects the deduction of Kosan's
projected net cash balance as of June 30. The deal has been unanimously approved
by the boards of both companies.
Kosan shares are currently halted. Prior the halt, the stock reached $5.28,
up about 220%, on volume of more than 230,000.
The companies also signed a separate licensing agreement that grants
Bristol-Myers an exclusive worldwide license to Kosan's epothilone compounds and
related intellectual property and data. The deal provides an initial payment of
$25 million for Kosan and entitles it to certain milestone and royalty payments.
Bristol-Myers expects to begin a cash tender offer for Kosan shares
immediately. It anticipates the offer will close in 30 days.
Kosan is scheduled to present updated data from a phase II trial of
tanespimycin, its lead Hsp90 inhibitor, at the annual meeting of the American
Society of Clinical Oncology, or ASCO, on June 3.
Based on Wednesday's close, Kosan shares were off about 54% since the start
of 2008. The company announced a workforce reduction of about 37% in mid-March
and said it would narrow its research focus to concentrate on clinical programs
for tanespimycin in multiple myeloma and in metastatic breast cancer and
epothilone KOS-1584 in non-small lung cancer.
It also named Helen Kim to the chief executive officer position on that
date. Kim's appointment followed the resignation of Robert Johnson from both the
CEO and president posts in late February.
Michael Baron
mb
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