Agerion Pharmaceutical, QTL To Merge To Form Rare Disease Company
In move to create a rare-disease focused biopharmaceutical company, Agerion Pharmaceutical and QLT Inc. have entered into a definitive merger agreement under which Aegerion will be merged with a wholly owned indirect subsidiary of QLT. Upon completion of the proposed merger, each outstanding share of Aegerion common stock will be exchanged for 1.0256 shares of QLT common stock. QLT plans to change its name upon the closing of the proposed transaction to Novelion Therapeutics Inc. and its common shares will trade on the NASDAQ Global Select Market and the Toronto Stock Exchange.
A broad-based investor syndicate comprised of both new investors and existing shareholders of both companies has committed to invest approximately $22 million in QLT and to vote in favor of the proposed transaction. This investment would be funded immediately prior to the transaction close and is expected to provide Novelion with additional capital to support future operations and the potential opportunity for targeted business development initiatives. Assuming completion of the proposed merger by the end of the third quarter of 2016, Novelion is expected to have an unrestricted cash balance of over $100 million.
The proposed transaction, which has been approved by the boards of directors of both companies, is expected to close late in the third quarter or during the fourth quarter of 2016, subject to approval by shareholders representing a majority of the outstanding common stock of each of QLT and Aegerion as well as other closing conditions. In addition to shareholder approval, the merger is subject to stock exchange approvals and other closing conditions, including, among others, regulatory approval and completion of a specified minimum of the private placement in QLT by the Investors.
The proposed merger is expected to create a strong, rare disease-focused global biopharmaceutical company consisting of Aegerion’s two commercially branded products, Juxtapid (lomitapide) capsules and Myalept (metreleptin), and QLT’s QLT091001 (zuretinol acetate), a Phase III-ready ultra-orphan fast track and orphan drug designated asset being developed for the treatment of inherited retinal disease caused by underlying mutations in RPE65 or LRAT genes.
Aegerion’s Chief Executive Officer, Mary Szela, who will serve as Chief Executive Officer of Novelion following the close of the transaction. Following the close of the transaction, Novelion is expected to have its principal headquarters in Vancouver, British Columbia, where QLT is currently located, with business operations in Cambridge, Massachusetts. The board of directors of Novelion will be comprised of 10 members, including four QLT designees, four Aegerion designees, and two shareholder representatives, one from Broadfin Capital and the other from Sarissa Capital. For a period of time that expires shortly after Novelion’s 2017 annual shareholder meeting, Sarissa Capital also has the right to designate an additional director to the Novelion Board.
Concurrent with the merger agreement, Aegerion and QLT have entered into a loan agreement under which QLT has agreed to loan Aegerion up to $15 million for working capital. Aegerion will borrow $3 million in connection with execution of the merger agreement and may borrow up to $3 million per month in subsequent months, subject to certain conditions, if and to the extent such amounts are necessary in order for Aegerion to maintain an unrestricted cash balance of $25 million.
Source: Agerion Pharmaceutical