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AMAG Pharmaceuticals Inc. of Lexington has announced plans to merge with Colorado company Allos Therapeutics Inc. in a stock-for-stock deal worth approximately $686 million. While the combined company will have its headquarters in Lexington, officials said in a release that it would be renamed.
Following the close of the deal, AMAG (Nasdaq: AMAG) shareholders would own approximately 61 percent and Allos (Nasdaq: ALTH) shareholders approximately 39 percent of the combined company. While the deal has the approval of the executives and boards of both companies, it still needs shareholder and regulatory approval. Officials said they anticipate the deal to close in the fourth quarter of this year.
The resulting as-yet unnamed combined company would have a nine-member board, with five coming from AMAG and four from Allos. Brian J.G. Pereira, president and CEO of AMAG, will continue in those roles in the combined company, while Allos president and CEO Paul L. Berns will hold a board seat. Chairman of the combined board will be AMAG’s current chairman Michael Narachi.
Each company brings an approved commercial product already on the market - AMAG has Feraheme, its iron replacement to treat iron deficiency anemia in adult chronic kidney disease patients and Allos has Folotyn, a treatment for patients with relapsed or refractory peripheral T-cell lymphoma. In addition, each company brings hundreds of millions in potential milestones to the deal. AMAG has a partnership with Takeda for Feraheme in Europe and other select territories with the potential to earn up to $220 million by meeting development and commercial milestones. Allos has a collaboration agreement with Mundipharma for Folotyn for markets outside the U.S. and Canada that has the potential to earn milestone payments of up to $310.5 million.
In May, AMAG’s executive vice president and chief financial officer David Arkowitz announced he would resign in late June to take a position with a biofuels company, and Edward C. English, 44, who is the company’s vice president and corporate controller, was tapped to serve as interim CFO during a search for a new CFO. In February, AMAG reported that Health Canada had stalled a new drug submission from AMAG with a notice of non-compliance for its Feraheme injection.
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