Wednesday, January 28, 2009

NitroMed accepts Deerfield buyout offer

By Mass High Tech staff

Lexington drug developer NitroMed Inc. reports it has accepted an offer to be bought by Deerfield Management, effectively ending NitroMed’s previous acquisition agreements with Archemix Corp. and JHP Pharmaceuticals LLC. The deal calls for Deerfield, which owns 12 percent of NitroMed already, to pay NitroMed stockholders 80 cents per share, about $36 million as of Tuesday, in cash.

In October, NitroMed announced an agreement for JHP Pharmaceuticals to buy its BiDil and BiDil XR drug business. And in November, the company announced a merger agreement with Cambridge biotech firm Archemix Corp. To terminate the two agreements, NitroMed agreed to pay about $900,000 to JHP and $1.5 million to Archemix.

In the past few weeks, NitroMed has stalled the calling of a stockholder meeting while it reconsidered the unsolicited offers from Deerfield. Meetings with the NitroMed board of directors concluded that Deerfield’s terms and conditions of its merger agreement were better than those existing in the agreements with JHP and Archemix. The Deerfield agreement includes a “go-shop” provision, which grants NitroMed the flexibility to “solicit, negotiate and evaluate competing acquisition proposals during a post-signing period ending on February 26, 2009.” A statement from NitroMed indicates that the company will actively pursue acquisition offers to compete with the Deerfield offer. The merger agreement awaits NitroMed stockholder approval.

NitroMed developed BiDil, a heart failure pill designed specifically for African-Americans. In January 2008, NitroMed laid off most of its staff and ceased marketing efforts for BiDil.