LAVAL, QC,
June 18, 2013 /CNW Telbec/ - BELLUS
Health Inc. (TSX: BLU) ("BELLUS Health") and Thallion
Pharmaceuticals Inc. ("Thallion") (TSXV: TLN) announced today that
BELLUS Health has agreed to acquire Thallion for approximately
$6.332 million in cash, or
$0.1765 per share (on a fully-diluted
basis), subject to certain adjustments as described below, and the
issuance of contingent value rights ("CVRs"), which will entitle
the holders thereof to additional payments of up to approximately
$7.66 million, or $0.2135 per CVR, if certain product revenue
milestones are achieved and a future receivable is collected.
"This non-dilutive transaction will strengthen
our pipeline through the addition of a Phase II drug candidate,"
said Roberto Bellini, CEO of BELLUS
Health. "We are excited about the opportunity to continue
developing Shigamabs® while leveraging our expertise in the kidney
and rare disease areas."
Thallion is developing Shigamabs®, a monoclonal
antibody therapy being evaluated for the treatment of Shiga
toxin-producing E. coli ("STEC") bacterial infections. STEC
infections can lead to hemolytic uremic syndrome (HUS), a condition
principally affecting the kidneys and that often leads to dialysis
and in certain cases death.
BELLUS Health's lead program is KIACTA™, a drug
candidate currently in a Phase III Confirmatory Study for the
treatment of AA amyloidosis, a rare disease resulting in kidney
dysfunction that often rapidly leads to dialysis and death.
"The proposed transaction is the result of the
strategic review process of all available alternatives for Thallion
and its shareholders previously announced in February 2013. We believe that the proposed
transaction provides a favourable outcome for our shareholders with
a significant premium over our current share price and an
additional opportunity to participate in future revenues that may
be generated from Shigamabs® under the terms of the CVRs." said Dr.
Allan Mandelzys, CEO of
Thallion.
Approval of Transaction at Thallion Annual
and Special Meeting of Shareholders
The acquisition will proceed by way of a
court-supervised arrangement pursuant to the Canada Business
Corporations Act (the "Arrangement"). A special meeting of
Thallion shareholders to consider the Arrangement is currently
expected to occur on or about August 6,
2013, concurrent with Thallion's annual meeting. A proxy
circular relating to the annual and special meeting and containing
further details regarding the Arrangement is expected to be mailed
to Thallion shareholders no later than July
16, 2013. Approval of at least 66 2/3% of Thallion
shareholders present in person or by proxy at the meeting will be
required to proceed with the Arrangement.
Unanimous Approval of Thallion Special
Committee and Board of Directors
The independent committee of Thallion's Board of
Directors that was established to consider all strategic
alternatives (the "Special Committee") has received a fairness
opinion (the "Opinion") dated June 17,
2013 from Bloom Burton & Co. Inc., Thallion's financial
advisor. The Opinion states that as of such date, the consideration
to be paid pursuant to the Arrangement is fair from a financial
point of view for the Thallion shareholders. After having taken
into consideration the Opinion and other factors, the Special
Committee recommended that the Board of Directors of Thallion
approve the Arrangement. The Board of Directors of Thallion,
excluding one director who was required to abstain from voting,
after receiving the recommendation of the Special Committee, has
unanimously approved the Arrangement, and in doing so has
determined that the consideration offered under the Arrangement is
fair to the Thallion shareholders and that the Arrangement is in
the best interest of Thallion. The Board of Directors recommends
that Thallion shareholders vote in favour of the Arrangement at the
annual and special meeting of shareholders. All directors and
officers of Thallion holding common shares of Thallion, as well as
Victoria Square Ventures Inc. and
1324286 Alberta Ltd. have entered into voting support agreements
supporting the transaction, representing 5.79% of the shares
outstanding of Thallion. The voting support agreements will
terminate upon any termination of the acquisition agreement between
BELLUS Health and Thallion relating to the Arrangement.
The Acquisition Agreement
The acquisition agreement between BELLUS Health
and Thallion provides for a cash consideration of approximately
$6.332 million ($0.1765 per common share (on a fully-diluted
basis)), subject to adjustments, and (ii) the issuance of one CVR
per common share, entitling the holder thereof to: (A) its pro
rata share of 80% of any additional purchase price
consideration to be received from Premium Brands Holding Corp.
("Premium Brands") in 2016 (expected to be up to approximately
$1.45 million) (or $0.0323 per CVR), and (B) its pro rata
share of 5% of the Shigamabs® revenue generated or received by
BELLUS Health, capped at $6.5 million
(or $0.1812 per CVR), payable in
installments upon the achievement by BELLUS Health of each whole
$10 million tranche of revenue on
Shigamabs®.
The estimated cash portion of the consideration
payable under the acquisition agreement and the combined cash and
CVR consideration (assuming that the maximum amount payable under
the CVRs is achieved) represent premiums of 35.8% and 200.0%,
respectively, to Thallion's closing trading price of $0.13 on the TSX Venture Exchange on June 17, 2013, premiums of 39.4% and 208.1%,
respectively, based on the volume weighted average trading price
for the 20 prior trading days and premiums of 52.4% and 263.9%,
respectively, based on the volume weighted average trading price
for the 90 prior trading days.
The amount to which the holders of CVRs may be
entitled can be reduced for potential contingent liabilities owing
by Thallion (including, but not limited to, in respect of the
indemnity agreement with Premium Brands, accounts payable or
litigation). The CVRs will not be assignable or transferable and
will not be listed on an exchange. Under the terms of the CVRs,
BELLUS Health will covenant and agree to use commercially
reasonable efforts within a reasonable time period from closing to
continue the development of Shigamabs® upon terms and conditions
detailed in the definitive transaction documents.
The acquisition agreement also contains
customary provisions prohibiting Thallion from soliciting any other
acquisition proposal, but allows for termination under certain
circumstances, including receipt of an unsolicited bona fide
acquisition proposal from a third party that the Thallion Board of
Directors, in the exercise of its fiduciary duties, and in
accordance with the terms and conditions of the acquisition
agreement, finds to be superior to the proposed transaction,
subject to the reimbursement by Thallion of BELLUS Health's
transaction-related expenses, up to an amount of $150,000. Completion of the Arrangement, which is
expected to occur in August 2013, is
subject to receipt of court and regulatory approvals and other
third party consents. The acquisition agreement also contains
closing conditions, including that Thallion have net cash on hand,
as determined pursuant to the terms of the acquisition agreement
("Net Cash"), of at least $7,500,000
on the Effective Date, that no more than 5% of Thallion
shareholders dissent to the Arrangement and other customary closing
conditions. The acquisition agreement also provides that if the Net
Cash condition is not met, BELLUS Health will have the option of
either terminating the acquisition agreement or reducing the cash
portion of the consideration payable under the Arrangement in
proportion to any shortfall on a dollar-for-dollar basis, pro
rata to each Thallion share, rounded to the nearest hundredth
of a cent. If Thallion's Net Cash at the effective date is
estimated to be in excess of $7,500,000, the cash portion of the consideration
payable under the Arrangement will instead be increased in
proportion to such excess amount on a dollar-for-dollar basis,
pro rata to each Thallion share, rounded to the nearest
hundredth of a cent. The parties intend to issue a further press
release on or about five business days before the annual and
special meeting, announcing any adjustments to the purchase price
relating to estimated Net Cash.
Copies of the acquisition agreement, voting
support agreements and certain related documents will be filed with
Canadian securities regulators and will be available on SEDAR at
www.sedar.com as part of Thallion's public filings.
About BELLUS Health
(www.bellushealth.com)
BELLUS Health is a development-focused
healthcare company concentrating on products that provide
innovative health solutions and address critical unmet medical
needs. The Company's lead program is KIACTA™, a novel drug
candidate currently in a Phase III Confirmatory Study for the
treatment of AA amyloidosis, an orphan indication resulting in
renal dysfunction that often rapidly leads to dialysis and death.
KIACTA™ is partnered with global private equity firm Auven
Therapeutics. AA amyloidosis affects approximately 35,000 to 50,000
individuals in the United States,
Europe and Japan.
About Thallion (www.thallion.com)
Thallion is a biotechnology company developing
pharmaceutical products in the areas of infectious disease and
oncology. Thallion's lead clinical program Shigamabs® is a dual
antibody product for the treatment of Shiga toxin-producing E. coli
bacterial infections and has recently completed a Phase II clinical
trial. Additional information about Thallion can be obtained at
www.thallion.com.
Forward Looking Statements
Certain statements contained in this news
release, other than statements of fact that are independently
verifiable at the date hereof, may constitute forward‐looking
statements. Such statements, based as they are on the current
expectations of management, inherently involve numerous risks and
uncertainties, known and unknown, many of which are beyond the
control of BELLUS Health Inc. or Thallion Pharmaceuticals Inc. Such
risks include but are not limited to: the ability to obtain Court
and regulatory approvals, third party consents and to satisfy other
closing conditions, adjustments may be made to the cash
consideration depending on the Net Cash, risks relating to the
satisfaction of payment conditions under the CVRs, the ability to
obtain financing, the impact of general economic conditions,
general conditions in the pharmaceutical and/or nutraceutical
industry, changes in the regulatory environment in the
jurisdictions in which the BELLUS Health Inc. and Thallion
Pharmaceuticals Inc. do business, stock market volatility,
fluctuations in costs, changes to the competitive environment due
to consolidation, achievement of forecasted burn rate, achievement
of forecasted clinical trial milestones, and that actual results
may vary once the final and quality‐controlled verification of data
and analyses has been completed. Consequently, actual future
results may differ materially from the anticipated results
expressed in the forward‐looking statements, and there can be no
assurance that any amounts will become payable under the CVRs. The
reader should not place undue reliance, if any, on any
forward‐looking statements included in this news release. These
statements speak only as of the date made and neither BELLUS Health
Inc. nor Thallion Pharmaceuticals Inc. is under any
obligation to update or revise such statements as a result of any
event, circumstances or otherwise, and BELLUS Health Inc. and
Thallion Pharmaceuticals Inc. disavow any intention to do so,
unless required by applicable legislation or regulation. Please see
the public fillings of BELLUS Health Inc. and Thallion
Pharmaceuticals Inc., including the Annual Information Form of
BELLUS Health Inc. for further risk factors that might affect both
companies and their respective businesses.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
SOURCE BELLUS Health Inc.