A Medical Device Daily
Clinical diagnostics maker Dade Behring (Deerfield, Illinois) reported that its board of directors has approved a quarterly cash dividend plan, the first in its history, and has declared that the initial dividend of 6 cents a share of common stock be payable on June 20 for shareholders of record as of June 1.
In addition, the board has approved a stock repurchase program of up to 2.5 million shares.
“Over time the company will purchase stock in the open market, as it deems appropriate, using free cash flow,” said John Duffey, Dade Behring’s CFO. “We will also continue to make the right investments in R&D and strategic customer initiatives, and to repay debt.”
The company also reported the closing of a new $600 million revolving credit facility, due 2010.
The new facility replaces Dade Behring’s former arrangement and is intended to create liquidity and save the company interest costs.
Under the company’s current credit ratings, U.S. dollar borrowing costs on the new facility are LIBOR plus 62.5 basis points. In 2Q05, the company will incur a one-time non-cash pre-tax charge of $8 million, representing the write-off of deferred financing fees from the pre-existing credit agreement.
Dade Behring’s board has also approved the immediate redemption of its remaining $275 million 11.91% senior subordinated notes, using the make-whole provision under the bond indenture. The company anticipates the redemption to occur in early June. The company will incur a one-time pre-tax cost of $24 million in the second 2Q05, which represents the premium paid to bondholders to redeem the bonds.
Matria Healthcare (Marietta, Georgia) said it has given notice of redemption to the noteholders of its 4.875% convertible senior subordinated notes due 2024. The redemption date of the senior notes has been set for May 27.
The company issued $86.25 million principal amount of its 4.875% convertible senior subordinated notes in connection with the repurchase of $120 million of its former 11% senior notes on June 30, 2004.
The terms of the 4.875% senior notes give the company the right to provide a notice of redemption to noteholders in the event that the closing price of Matria’s common stock exceeds 150% of the conversion price for at least 20 trading days in any consecutive 30 trading days preceding the mailing of the notice of redemption to the noteholders.
The company provided that notice to noteholders on April 27. The noteholders may elect to receive cash in the redemption or convert the notes, on or before May 26, into shares of Matria common stock at a conversion rate of 50.87295 shares per $1,000 principal amount of the notes.
The conversion price for the notes is about $19.66 per share.
Since the company’s stock is trading well above the conversion price, it said it expects the vast majority of the noteholders to convert into shares of Matria common stock in lieu of cash.
Matria is a provider of health enhancement programs to health plans and employers.
ImmunoGen (Cambridge, Massachusetts) said that Genentech (South San Francisco, California) has licensed exclusive rights to use its Tumor-Activated Prodrug (TAP) technology with therapeutic antibodies to an undisclosed target.
This license is in addition to the existing agreement between the companies that grants Genentech exclusive rights to use ImmunoGen’s technology with therapeutic antibodies to HER2.
ImmunoGen’s TAP technology uses tumor-targeting antibodies to deliver a cell-killing agent specifically to cancer cells. The company uses its TAP technology to develop its own products, and helps fund its product programs by selectively outlicensing its technology to other companies for use with their antibodies.
This license agreement stems from a 2000 agreement between the companies that grants Genentech certain rights to test the TAP technology with Genentech’s therapeutic antibodies to specific targets. Under the agreement, Genentech must take a license for each target in order to use ImmunoGen’s technology to develop products with therapeutic antibodies to that target.
Under the terms defined in the 2000 agreement, ImmunoGen receives a $1 million license payment, and is entitled to receive milestone payments; ImmunoGen also is entitled to receive royalties on the sales of any resulting products. Genentech is responsible for the development, manufacturing, and marketing of any products resulting from the license.