A Medical Device Daily
V.I. Technologies (Watertown, Massachusetts), a biotech firm developing next-generation anti-infective therapeutics, reported closing its previously disclosed merger with Panacos Pharmaceuticals (Gaithersburg, Maryland), continuing what appears to be a move away from its blood cleansing technology to pharmaceutical development (Medical Device Daily, June 4, 2004).
Vitex will issue about 227.5 million shares to Panacos stockholders to acquire all Panacos outstanding shares. And Vitex reported closing a $20 million private placement of common stock and warrants to purchase its common stock that was a condition of the merger closing. Vitex issued 100 million shares of its common stock (at 20 cents a share), and detachable warrants to purchase up to 45 million shares of its common stock at 24 cents a share, exercisable for five years.
The merged company will be headquartered in Watertown, Massachusetts, with its R&D facility in Gaithersburg.
"We are very pleased to have closed the merger with Panacos Pharmaceuticals," said Samuel Ackerman, chairman and CEO of Vitex. "We welcome the Panacos scientific and development team led by Dr. Graham Allaway and look forward to working with them to create innovative drugs for major viral diseases. PA-457 has shown potential as an HIV therapeutic in early clinical trials, and has a novel mechanism of action that was discovered by Panacos scientists. We are pleased with its rapid progress in the clinic thus far, and the results of the ongoing Phase IIa trial of PA-457 are expected in mid-2005."
John Barr, president of Vitex, called the merger with Panacos "a major step for Vitex toward becoming a leader in development of anti-infective therapeutic products."
S.G. Cowen & Co. acted as the lead placement agent; Legg Mason Wood Walker acted as the co-placement agent.
Vitex is developing drugs for the treatment of HIV and other major human viral diseases. Its Inactine technology is designed to inactivate a range of viruses, bacteria and parasites, and it has demonstrated the ability to remove prion proteins. More than 40 million red cell units are transfused annually in the U.S., Europe and Japan, it has reported.
Founded in 2000, Panacos focuses on discovering drugs for HIV infection and other major viral diseases. It calls PA-457 "the first in a new class of HIV drugs called maturation inhibitors discovered by Panacos scientists." It is a once-daily oral drug candidate equally effective in preclinical studies against HIV strains resistant or sensitive to existing HIV drugs. Panacos recently reported successful results of a Phase I/II clinical study in which a single oral dose of PA-457 administered to HIV-infected patients not on other HIV therapy produced a dose-dependent reduction in HIV viral load, including HIV resistant to existing classes of HIV drugs. PA-457 has been granted Fast Track status by the FDA.
In another deal completion: Varian (Palo Alto, California) said it closed the previously reported sale of its Electronics Manufacturing business to Jabil Circuit (St. Petersburg, Florida) for $195 million (MDD, Feb. 8, 2005).
Varian said that the sale of the electronics unit, subject to post-closing price adjustments, will advance its strategy of increased focus on its Scientific Instruments and Vacuum Technologies segments.
For its part, Jabil said the acquisition will support its growth in the medical, instrumentation and military/aerospace sectors, which, it noted, "have high mix and low-volume characteristics that a focused business model will address."
Jabil said the transaction will be accretive to its earnings during FY05; specific guidance will be provided during a March 17 earnings report.
Varian previously announced that it would begin repurchases of up to $145 million of its common stock with completion of the spin-off. That program is in effect, it said, replacing a previous authorization to repurchase up to 1 million shares, under which about 800,000 shares were repurchased since the company disclosed the plan to sell the electronics business.
Varian is a leading supplier of scientific instruments and vacuum technologies for life science and industrial applications. Employing about 3,500, the company operates facilities in 12 locations in North America, Europe and the Pacific Rim.
Jabil provides electronics design, manufacturing and product management services to global electronics and technology companies.