Cephalon Announces Acquisition of Salmedix
Cephalon, Inc. announced that it has signed a definitive merger agreement under which it will acquire all of the outstanding capital stock of Salmedix, Inc. for approximately $160 million cash; the company is required to pay an additional $40 million of cash payments upon the achievement of certain regulatory milestones. At the close of the transaction, Salmedix is expected to have approximately $25 million in cash on hand, net of transaction-related expenses. The agreement is subject to customary closing conditions including the receipt of necessary regulatory approvals.
Salmedix's most advanced product, Treanda(TM) (bendamustine hydrochloride), is currently in Phase II clinical trials in the United States and Canada for the treatment of indolent (slowly progressing) non-Hodgkin's lymphoma (NHL), a type of hematologic malignancy. One ongoing Phase II study is evaluating the use of Treanda as a single agent in patients with NHL who are refractory to Rituxan(R) (rituximab). A second on-going study is evaluating Treanda in combination with rituximab in patients who are potentially sensitive to rituximab. Data presented at the 2004 Annual Meeting of the American Society of Hematology indicate that Treanda has an acceptable safety profile and demonstrates high response rates as a single agent in patients with relapsed indolent NHL that is refractory to rituximab.
Bendamustine hydrochloride is currently marketed in Germany by a third party for the treatment of non-Hodgkin's lymphoma, chronic lymphocytic leukemia, multiple myeloma, metastatic breast cancer and other solid tumors. Extensive data have been published by third parties on hematological and solid tumor studies with bendamustine hydrochloride.
The merger is expected to close in the second quarter of 2005, after which Salmedix will become a wholly-owned subsidiary of Cephalon. Cephalon expects the transaction to be $0.10-0.15 per share dilutive to its 2005 earnings and will reissue 2005 earnings guidance when the transaction closes.
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