By Karen Young
Advanced Photonix Inc. entered into a letter of intent that would allow it to merge with Jenner Biotherapies Inc. in a deal worth about $20 million.
Under the deal, privately held Jenner, based in Walworth, Wis., would merge with a yet to be formed subsidiary of API, which develops standard and custom silicon photodetectors and optoelectronic assemblies.
Essentially, however, the subsidiary would be Jenner, and the companies would continue to operate separately, said Susan Schmidt, spokeswoman for API, of Camarillo, Calif. She also said that initially there are no plans to relocate either company.
The companies announced earlier this year that they were in discussions. Completion of the transaction is contingent on an opinion from Stout, Risius, Ross Inc. that the merger is fair to the stockholders of API, and the execution of a definitive merger agreement, as well as other, unspecified conditions.
The transaction calls for Jenner stockholders to receive about 28.6 million shares of API common stock, or about 70 percent of the combined company. The number of shares could be increased or reduced depending on Jenner¿s assets/liabilities profile when the deal becomes effective.
API¿s stock (AMEX:API) fell 2 cents Friday to close at 68 cents.
¿The board really felt like this would benefit the API shareholders,¿ Schmidt said.
Hayden Leason and The Leason Family Partnership are the principal stockholders of Jenner. Leason is a former chairman, CEO and principal shareholder of API. Schmidt said that while it was yet to be determined, it is ¿safe to assume¿ that Leason will be the head of the new subsidiary. Also, the shareholders of Jenner will have the power to elect all of the directors of API.
Despite Leason¿s involvement in both companies, Schmidt said, ¿I don¿t think that¿s the reason for the combination of the two companies.¿
Jenner was incorporated as Jenner Technologies Inc. in 1992 to develop immunotherapies for cancer. The company later changed its name to Jenner Biotherapies and today and has two product platforms: vaccines for the therapy of cancer, including prostate, colorectal and lung cancers; and macrophage activators for cancer therapy and abrogation of the side effects of chemotherapy.
Jenner has a worldwide license agreement with a Japanese company for its PSA vaccine, a therapeutic prostate cancer vaccine that stimulates the body¿s own immune system to attack prostate cancer cells. That deal involves milestone payments and a payment of $10 million upon the FDA¿s approval of a new drug or biologics license application. Jenner also will be entitled to receive royalties. The licensee has a right to end the agreement at any time.
Jenner¿s products under development include Mepact, a liposome product that is a macrophage activator for use against osteosarcoma, which completed a Phase III trial; Jenact, a macrophage activator being developed for treatment of side effects of chemotherapy; KSA vaccine, a cancer vaccine developed for use against colon and other cancers; and Emuact, a vaccine emulsion developed for use in conjunction with the delivery of Jenner¿s cancer vaccines.
Jenner officials did not return phone calls seeking comment.