MGI PHARMA Completes Acquisition of Guilford Pharmaceuticals
03 Octubre 2005 - 3:00PM
Business Wire
MGI PHARMA, INC. (Nasdaq:MOGN): -- Combined Company Markets
Aloxi(R) Injection and Gliadel(R) Wafer -- Response to Dacogen(R)
Injection Approvable Letter On Track -- Saforis(TM) Oral Suspension
NDA Preparation Underway -- Robust Oncology and Acute Care Pipeline
Includes Four Pivotal Programs -- Updated Financial Guidance
Provided MGI PHARMA, INC. (Nasdaq:MOGN), an oncology and acute care
focused biopharmaceutical company, today announced that it closed
its previously-announced acquisition of Guilford Pharmaceuticals
Inc., a biopharmaceutical company engaged in the research,
development and commercialization of drugs that target the acute
care market, on October 3, 2005. Under the terms of the
acquisition, which was approved by Guilford's shareholders, all
shares of Guilford were exchanged for 5.3 million shares of MGI
PHARMA stock plus $53.9 million in cash, which represents $3.75 per
Guilford share, as determined based on MGI PHARMA's five day
average stock price ending on September 25, 2005 (three days prior
to the transaction closing date), or total consideration of $179.6
million. As part of this transaction, Dean Mitchell, formerly the
president and chief executive officer of Guilford, has joined the
MGI PHARMA Board of Directors. In addition, MGI PHARMA has
extinguished an approximate $60 million obligation related to a
revenue interest agreement between Guilford and Paul Royalty Fund.
MGI PHARMA intends to offer to repurchase Guilford's convertible
debt during the fourth quarter of 2005, which totaled $69.4 million
as of June 30, 2005. MGI PHARMA's obligation to provide Guilford
with bridge financing in the event that the acquisition closed
after October 1, 2005 has terminated. "This strategic transaction
enhances MGI PHARMA's late-stage acute care development pipeline by
adding Aquavan(R) Injection, a complementary product to Aloxi(R)
injection for PONV, and adds Gliadel(R) Wafer to our franchise of
marketed oncology products," said Lonnie Moulder, president and
chief executive officer of MGI PHARMA. "Integration of our two
organizations is well underway, and we continue to expect to
recognize the efficiencies related to this transaction over the
coming quarters. We look forward to leveraging the Guilford field
organization's well-established relationships in acute care to
enhance the penetration of Aloxi injection for CINV in the hospital
market and advancing our expanded research and development
pipeline." Building Franchises in Oncology and Acute Care Aloxi(R)
Injection for Chemotherapy-Induced Nausea and Vomiting (CINV) MGI
PHARMA markets Aloxi (palonosetron hydrochloride) injection at a
dose of 0.25 mg for the prevention of acute nausea and vomiting
associated with initial and repeat courses of moderately and highly
emetogenic cancer chemotherapy, and for the prevention of delayed
nausea and vomiting associated with initial and repeat courses of
moderately emetogenic cancer chemotherapy. Aloxi injection holds
the number one market share position among injectable 5-HT3
receptor antagonists in the CINV market. Sales of Aloxi injection
for 2005 are expected to be in the range of $250 to $260 million.
MGI PHARMA projects that peak sales of Aloxi injection and Aloxi
oral for CINV may approximate $500 million annually. Gliadel(R)
Wafer Gliadel (polifeprosan 20 with carmustine implant) Wafer is a
biodegradable wafer containing the chemotherapy agent carmustine,
or BCNU, approved for the treatment of high-grade malignant gliomas
as an adjunct to surgery and radiation. MGI PHARMA expects that
Gliadel Wafer will be complementary with the Company's existing
oncology franchise and immediately additive to MGI PHARMA's
revenues. MGI PHARMA anticipates that fourth quarter Gliadel Wafer
sales will approximate $10 million. Dacogen(TM) Injection for
Myelodysplastic Syndromes (MDS) Dacogen (decitabine) injection is a
product candidate that belongs to a class of drugs called
hypomethylating agents and is the subject of more than 40 ongoing
clinical trials including studies of various dosing regimens in
MDS, a pivotal program in acute myeloid leukemia (AML), phase 2
studies in chronic myeloid leukemia (CML), and phase 1 trials in
solid tumors. An approvable letter was received from the FDA for
Dacogen injection in MDS on September 1, 2005, and the Company is
diligently working to provide the requested analyses to the FDA
early in the fourth quarter. The Marketing Authorization
Application (MAA) for Dacogen injection for MDS is currently under
review by the European Medicines Agency (EMEA). MGI PHARMA projects
that peak sales of Dacogen injection may exceed $250 million
annually. Saforis(TM) Oral Suspension for Oral Mucositis Saforis
oral suspension, a product candidate, is an oral formulation of
L-glutamine in a proprietary delivery vehicle designed to increase
uptake of glutamine by the oral mucosa. Data from a phase 3 trial
of Saforis oral suspension, conducted in 326 breast cancer patients
receiving anthracycline-based chemotherapy regimens, was the
subject of an oral presentation at the American Society of Clinical
Oncology (ASCO) annual meeting in 2004. Saforis oral suspension
successfully met the primary endpoint of this trial, which
indicated that patients receiving Saforis experienced a 22% risk
reduction of clinically significant (WHO is greater than or equal
to grade 2) oral mucositis compared with placebo. Side effects of
Saforis treatment were mild in nature and similar to placebo. MGI
PHARMA plans to submit a New Drug Application (NDA) to the U.S.
Food and Drug Administration (FDA) early in the fourth quarter of
2005. MGI PHARMA estimates that peak sales of Saforis oral
suspension may approximate $100 million annually. Aquavan(R)
Injection Aquavan (fospropofol disodium) injection is a product
candidate for procedural sedation that may offer the benefits of
rapid onset and recovery. A randomized, dose-ranging study designed
to evaluate four doses of Aquavan injection in patients undergoing
colonoscopy is ongoing in order to optimize its pharmacological
profile. Following completion of this dosing study, MGI PHARMA
plans to evaluate Aquavan injection in a pivotal program to support
a New Drug Application (NDA) filing with the Food and Drug
Administration (FDA). The Aquavan injection pivotal program is
planned to begin in early 2006. MGI PHARMA estimates that peak
sales of Aquavan injection may exceed $250 million annually.
Aloxi(R) Injection for Post-Operative Nausea & Vomiting (PONV)
Aloxi injection is currently being evaluated in a pivotal program
for the prevention of post-operative nausea and vomiting. Two
clinical trials are evaluating three doses of Aloxi injection
(0.025mg, 0.050 mg, or 0.075 mg) in more than 1,000 patients
undergoing outpatient abdominal or gynecological laproscopic
surgery or inpatient gynecological or breast surgery. The
co-primary endpoint of this study is complete response rate,
defined as no emesis and no use of rescue medication, during the
first 24 hours and 24-72 hour periods following surgery. The
Company projects that peak sales of Aloxi injection for PONV may
exceed $250 million annually. ZYC101a ZYC101a, a product candidate,
is an immune response therapeutic currently being evaluated in a
pivotal program designed to evaluate ZYC101a in young women with
high grade cervical dysplasia, a condition that can lead to
cervical cancer. Administration of ZYC101a stimulates an immune
response that targets cells containing human papillomavirus (HPV),
the agent that causes both cervical dysplasia and cervical cancer.
A phase 2, multicenter, randomized placebo controlled study of 161
women with high-grade cervical dysplasia indicated that in a
prospectively defined cohort of patients under 25 years of age,
ZYC101a promoted complete resolution of high-grade dysplasia in 70%
of patients, versus 23% in the placebo arm. The most frequently
observed adverse event in these studies was mild to moderate
injection site pain, which was manageable with ibuprofen or
acetaminophen. MGI PHARMA anticipates that peak sales of ZYC101a
may exceed $250 million annually. Irofulven Irofulven, MGI PHARMA's
novel and broadly active anti-cancer agent, is a product candidate
currently being studied in a series of phase 1 and 2 monotherapy
and combination therapy clinical trials. A multicenter, phase 2
clinical trial of irofulven in approximately 135 patients with
hormone refractory prostate cancer is currently ongoing and is
designed to assess time to disease progression, PSA response, pain
palliation, survival, and quality of life in hormone-refractory
prostate cancer patients who have progressed following treatment
with docetaxel. MGI PHARMA plans to evaluate the results of this
program with a goal to identify the registration path for irofulven
before the end of 2005. Neuroimmunophilin Ligands and GPI 1485 GPI
1485 is a product candidate that belongs to a class of small
molecule compounds called neuroimmunophilin ligands. In preclinical
experiments, neuroimmunophilin ligands have been shown to repair
and regenerate damaged nerves without affecting normal, healthy
nerves. GPI 1485 is being studied in phase 2 clinical trials for
the treatment of Parkinson's disease and post-prostatectomy
erectile dysfunction and in pre-clinical development for HIV
related dementia and neuropathy. GPI 1485 is licensed to Symphony
Neuro Development Company. ZYC300 ZYC300, an encapsulated plasmid
encoding a novel tumor antigen, has completed a phase 1 study in 17
patients with late stage metastatic hematological and solid tumors.
Data from this study were selected for oral presentation at ASCO
2003, and indicated that ZYC300 was well tolerated and biologically
active. MGI PHARMA plans to advance the ZYC300 clinical program in
solid tumors before the end of 2005. NAALADase Inhibitors
N-Acetylated-Alpha-Linked-Acid-Dipeptidase (NAALADase) is a
membrane-bound enzyme found principally in the central and
peripheral nervous systems that is believed to play a role in
modulating the release of glutamate, one of the brain's most common
chemical messengers. During conditions of acute injury or chronic
disease, there is a large increase in glutamate release that causes
a cascade of biochemical events, ultimately leading to cell injury
and death. MGI PHARMA is currently pursuing applications for
NAALADase inhibitors in the area of chemotherapy-induced neuropathy
in preclinical studies. PARP Inhibitors Poly (ADP-Ribose)
polymerase (PARP) is a nuclear enzyme involved in repairing DNA or
damage, mediating cell death and regulating immune response. PARP
activation occurs when cells are damaged in instances such as
during chemotherapy and cancer radiation therapy. Targeting PARP
may prevent tumor cells from repairing DNA themselves and
developing drug resistance, which may make them more sensitive to
cancer therapies. The Company is focused on evaluating PARP
inhibition as a chemotherapy and radiation therapy sensitizer in a
preclinical program. Financial Impact For the year ending December
31, 2005, including the impact of the Guilford transaction, MGI
PHARMA now anticipates: -- Total revenue of approximately $280 to
290 million, including -- Aloxi injection product sales of
approximately $250 to 260 million; -- Cost of product sales of
approximately $92 to 96 million; -- SG&A expenses of
approximately $90 million; -- Net R&D expenses of approximately
$70 million(a); -- Preliminary in process R&D of approximately
$150 million; -- Preliminary GAAP operating loss from continuing
operations of $116 to $122 million; and -- Preliminary pro forma
operating income from continuing operations of $30 to $36 million.
(Note: GAAP refers to U.S. generally accepted accounting
principles. MGI PHARMA's pro-forma operating income from continuing
operations shown above excludes acquired in-process research and
development expenses of $150 million and amortization of product
acquisition intangible assets of $2 million. We are providing pro
forma financial guidance in addition to, and not as a substitute
for, financial measures calculated in accordance with GAAP. The
Company is providing this pro forma number to facilitate a
comparison of our business from period to period and allow
investors to analyze revenues and operating expenses related to our
core business. We encourage investors to carefully consider our
financial guidance and results under GAAP, as well as our pro forma
disclosures and the reconciliation between these presentations to
more fully understand our business.) (a) Includes an estimated $3
million related to expenses incurred for Symphony Neuro Development
Company, which are reversed as minority interest prior to computing
pre-tax income. The effect of FASB Statement No. 123 (Revised
2004), Share-Based Payment, is not included in this guidance.
Aggrastat(R) injection-related revenues and expenses will be
accounted for as discontinued operations, as MGI PHARMA plans to
continue efforts to divest this product. Although transaction
timing and structure are difficult to predict, MGI PHARMA remains
focused on and is in active discussions related to identifying
commercialization paths outside of North America for our pipeline
of late stage product candidates, including Dacogen injection,
Saforis oral suspension, Aquavan injection, ZYC101a, and irofulven.
MGI PHARMA expects this transaction to be accretive beginning in
2008 and to significantly accelerate future earnings growth. Driven
primarily by the pivotal development program for Aquavan and
pre-launch costs, the net reduction of pre-tax income in 2006 and
2007 is expected to be approximately $35 million and $25 million,
respectively. MGI PHARMA plans to announce its third quarter 2005
results after market close on Wednesday, October 19, 2005. About
MGI PHARMA MGI PHARMA, INC. is an oncology and acute care focused
biopharmaceutical company that acquires, develops and
commercializes proprietary products that address the unmet needs of
patients. MGI PHARMA markets Aloxi(R) (palonosetron hydrochloride)
injection and Gliadel(R) Wafer (polifeprosan 20 with carmustine
implant) in the United States. The company directly markets its
products in the U.S. and collaborates with partners to reach
international markets. For more information about MGI PHARMA,
please visit www.mgipharma.com. THIS ANNOUNCEMENT IS NEITHER AN
OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER TO SELL THE
GUILFORD PHARMACEUTICALS INC. 5% CONVERTIBLE SUBORDINATED NOTES DUE
JULY 1, 2008 (THE "NOTES"). AT THE TIME THE OFFER IS COMMENCED, MGI
PHARMA, INC. AND ITS WHOLLY OWNED SUBSIDIARY, MGI GP, INC., WILL
FILE A TENDER OFFER STATEMENT WITH THE U.S. SECURITIES AND EXCHANGE
COMMISSION. THE TENDER OFFER STATEMENT (INCLUDING AN OFFER TO
PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER
DOCUMENTS) WILL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ
CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
THE OFFER TO PURCHASE, THE RELATED LETTER OF TRANSMITTAL AND
CERTAIN OTHER OFFER DOCUMENTS WILL BE MADE AVAILABLE TO ALL
NOTEHOLDERS AT NO EXPENSE TO THEM. WHEN AVAILABLE, THE TENDER OFFER
STATEMENT (INCLUDING THE OFFER TO PURCHASE, THE RELATED LETTER OF
TRANSMITTAL AND ALL OTHER OFFER DOCUMENTS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION) CAN BE OBTAINED AT NO CHARGE AT THE
COMMISSION'S WEBSITE AT WWW.SEC.GOV, OR FROM MGI PHARMA'S INVESTOR
RELATIONS DEPARTMENT BY CALLING (212)332-4381. This news release
contains certain "forward-looking" statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These
statements are typically preceded by words such as "believes," "
expects," "anticipates," "intends," "will," "may," "should," or
similar expressions. These forward-looking statements are not
guarantees of MGI PHARMA's future performance and involve a number
of risks and uncertainties that may cause actual results to differ
materially from the results discussed in these statements. Factors
that might cause either company's results to differ materially from
those expressed or implied by such forward-looking statements
include, but are not limited to, the ability of MGI PHARMA's
product candidates to be proven safe and effective in humans, to
receive marketing authorization from regulatory authorities, and to
ultimately compete successfully with other therapies; continued
sales of MGI PHARMA's marketed products; development or acquisition
of additional products; reliance on contract manufacturing; changes
in strategic alliances; continued access to capital; ability of MGI
PHARMA to successfully complete the integration of Guilford with
its existing operations; the risk that the perceived advantages of
the Guilford transaction may not be achieved; and other risks and
uncertainties detailed from time to time in MGI PHARMA's filings
with the Securities and Exchange Commission including its most
recently filed Form 10-Q or 10-K. MGI PHARMA undertakes no duty to
update any of these forward-looking statements to conform them to
actual results.
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