By Randall Osborne
With two products pending FDA approval, SangStat Medical Corp. signed a binding agreement to buy Imtix, a transplant business owned by French vaccine maker Pasteur Merieux Connaught (PMC), for $33 million in cash.
"It gives us products already on the market in Europe," said Philippe Pouletty, chairman and CEO of Menlo Park, Calif.-based SangStat. "[The deal] makes us a global company."
The purchase includes an up-front payment of $12 million at closing, and deferred cash payments of $21 million over five years. The payments are weighted in the latter years, said Maree Wall, spokeswoman for SangStat.
"[Payments for years] one and two are a little bit lower than three, four and five," Wall said. "We had $83 million in the bank at the end of this quarter, so we can easily make the initial payment."
The sale price — about 1.3 times Imtix's expected annual sales of $22 million to $28 million — was much lower than expected by analysts, she added. They predicted the amount would be two to four times the sales total, Wall noted.
"It's always nice to be able to surprise [Wall] Street in a favorable way," she said.
SangStat will pay PMC, which is part of the Paris-based Rhone-Poulenc Group, royalties on Imtix product sales.
Two months ago, SangStat said advanced talks were under way with Imtix, of Lyon, France, and the sale was expected to go without a hitch. (See BioWorld Today, April 16, 1998, p. 1.)
Imtix's portfolio includes Thymoglobulin and Lymphoglobuline, polyspecific antibodies already distributed in Europe and other countries; Odulimomab (anti-lymphocyte function antigen-1), a monoclonal antibody in Phase III trials for preventing delayed graft function in transplant patients; and an organ preservation solution called Celsior. An application for 510(k) clearance in the U.S. for Celsior is expected later this year.
SangStat licensed the North American rights to Celsior and Thymoglobulin from PMC in 1993.
Thymoglobulin, a pasteurized rabbit anti-human thymocyte immunoglobulin, induces immunosuppression as a result of T cell depletion. Marketed in 51 countries, it is used for the prevention and treatment of acute graft rejection episodes in transplant recipients.
Thymoglobulin Reaches Labeling Discussions
A new drug application (NDA) for Thymoglobulin is under review at the FDA, Wall said. The review is believed to be near completion.
"We're expecting action very soon," Wall told BioWorld Today. "We're in product labeling discussions, which is a good sign."
Lymphoglobuline is a horse anti-human thymocyte immunoglobulin available in 55 countries for the same indications, and for treatment of severe hematological disorders. SangStat will not pursue the drug's approval in the U.S., Wall said.
"It will still be of great value in the countires where it's available," she said. After the acquisition closes, which is expected to happen by year's end, SangStat will provide more marketing and sales support for Thymoglobulin.
"There's a lot of data building to suggest the rabbit-derived [Thymoglobulin] is the preferred product," Wall said. The data include results from a Phase II trial done by SangStat, in addition to the research required for filing the NDA.
The Phase III trial for Odulimomab is expected to conclude next year. "It's not clear whether this will be the final one," Wall said.
Pouletty said SangStat's purchase could mark a trend in the industry.
"One thing, which is a little different, is that SangStat, the small biotech company, is making the acquisition of part of a large pharma company," he said.
"We have a niche market and we kept our commercial rights, as opposed to companies that sell away their technology early," Pouletty added. "[Doing that] may be favorable in the near term, but a few years later, the company may find it difficult to grow."
SangStat has filed with the FDA for clearance of its formulation of cyclosporine, called Sang-35, for treatment of chronic transplant rejection. In February, the agency responded with a "minor deficiency" letter related to the application. SangStat responded to questions and is awaiting further word.
Also in February, the company filed in Europe for marketing clearance for cyclosporine.
SangStat's stock (NASDAQ:SANG) closed Thursday at $30, up $0.312. *