North American Biologicals Inc., a plasma supplier, andUnivax Biologics Inc., a developer of plasma-derivedantibody-based drugs, agreed Monday to a $150 millionmerger that creates a new member of biotechnology's toptier.
With revenues of $200 million, a combined NorthAmerican-Univax would be No. 4 in total revenue andNo. 6 in total income, said Thomas Stagnaro, Univax'spresident and CEO.
Bolstering the merger is a long-term agreement betweenUnivax and Chiron Corp., of Emeryville, Calif., in whichUnivax has options to make immunoglobulin productsfrom Chiron Biocine's pipeline of vaccines.
North American's takeover of Univax brings together thelatter's antibody drug development with NorthAmerican's plasma supply and manufacturingcapabilities. In making its immunoglobulin drugs, Univaxuses antibodies stimulated in donor plasma.
"We bring the sizzle to the meat and potatoes that NorthAmerican Biologicals has put together," Stagnaro said.
Alfred Fernandez, North American's chief financialofficer, said Univax needed financial resources to supportits pipeline of products while his company, with itsmanufacturing, blood donor management and cash flow,wanted drug candidates so it could move beyond its corebusiness of selling plasma.
Univax's stock (NASDAQ:UNVX) closed down 13 centsMonday to $8. North American was off 81 cents to$10.37. Chiron (NASDAQ:CHIR) ended the day at$87.25, down 50 cents.
With an estimated $200 million in revenues for 1995,Miami-based North American is expected to generate anet income of $20 million for the year. The company's1994 revenues were $165 million. Univax posted a $6million loss for the second quarter of 1995. Thecompany's net loss for 1994 totaled $21.8 million.
Under terms of the merger, Univax shareholders willreceive .79 North American shares for each Univax share.Based on the $11.20 closing price Friday of NorthAmerican's stock (NASDAQ: NBIO) and about 17.1million Univax shares outstanding, the swap is valued atmore than $150 million. Shareholders are expected tovote on the merger in November.
In addition to a product pipeline that now includes drugcandidates derived from Chiron Biocine's potentialvaccines for such diseases as cytomegalovirus, herpes andhepatitis C, North American will receive about $10million in cash from Univax and an FDA approved drug,WinRho.
The merged company initially will take the name ofNorth American Biologicals and have its headquarters inBoca Raton, Fla., where North American is located.Operations for research, development and clinical affairswill be centered at Univax's offices and laboratories inRockville, Md.
Stagnaro said no personnel reductions are planned.Univax, which restructured in May and laid off 40employees, has 130 staffers. North American, which callsitself "the world's largest independent provider of humanblood plasma elements," has 1,600 employees at 78collection centers in the U.S. and Germany as well as apilot manufacturing facility in Miami. A new plant isunder construction in Boca Raton.
North American's chairman, president and CEO, DavidGury, will retain those same positions in the mergedcompany. Stagnaro will be senior executive vicepresident in charge of research, development, sales andmarketing.
Most of North American's revenue is derived fromstandard and specialty plasma sales. The company alsohas a marketed drug, H-BIG (hepatitis Bimmunoglobulin), which is expected to generate about$13 million this year.
Univax's WinRho, approved in March, is a polyclonalantibody for prevention of Rh isoimmunization inpregnant women and for treatment of immunethrombocytopenic purpura, a platelet disorder that cancause uncontrolled bleeding. The company has two otherpolyclonal antibodies under development: StaphGAM,for staphylococcus, and HyperGAM+CF for cysticfibrosis.
Stagnaro estimated WinRho sales for 1995 at about $4million. Wall Street analysts have projected 1996 sales ashigh as $35 million, but the drug was not expected topush Univax into profitability.
Stagnaro said Univax and North American begandiscussing a merger in June. The two companies alreadyhad an agreement involving WinRho and Stagnaro andGury used to work together at Alpha Therapeutic Corp. inLos Angeles.
In addition, during their talks the companies learned theyboth were trying to land the Chiron Biocine collaboration.Chiron officials supported the merger.
No financial details were disclosed in the agreementbetween Univax and Chiron Biocine. Univax has theoption to use any Biocine vaccine to develop antibody-based products. In return, Univax will make milestonepayments to Chiron and share royalties. Chiron hasagreed to reimburse Univax for development costs onproducts that are marketed.
Univax will use Chiron candidate vaccines that alreadyhave completed Phase I safety studies to stimulateantibodies in donor plasma. Univax then will conduct theclinical trials for the immunoglobulin products. The firsteffort will target development of a cytomegalovirushyperimmune globulin drug from Chiron Biocine'scytomegalo-virus vaccine. Univax expects to begin PhaseI/II studies in 1996.
In addition, Univax will be able to use Chiron Biocine'svaccine adjuvant, MF59, to determine if it can helpenhance immunoglobulin drugs. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.