US drugmaker Javelin Pharmaceuticals says Hospira’s takeover bid is “superior” and terminates agreement with Myriad Pharmaceuticals (MPI).
Massachusetts, based Javelin, which develops improved formulations of existing pharmaceuticals and new drugs, said Hospira has offered $2.20 per share and has agreed to lend it up to $4.5m (€3.3m) to fund operations until the takeover is complete.
Illinois-headquartered Hospira has also agreed to provide Javelin with funds to terminate the “definitive” takeover agreement it signed with MPI in December last year.
Javelin CEO Martin Driscoll said that: “After consultation with our advisors, and in accordance with our merger agreement with MPI, [we] determined that Hospira's proposal is a company superior proposal.
Driscoll said that MPI now has five days to up its bid, adding that if it “ does not favourably adjust the terms of its offer, then our Board expects to enter into the proposed merger and loan agreements negotiated with Hospira."
Hospira has not yet said why it is interested in Javelin, although the firm’s formulation development expertise would fit with efforts to expand its non-branded drug business,
Last October for example, Hospira acquired a biomanufacturing plant in Croatia from drugmaker Pliva. More recently the US firm bought Orchid Chemicals and Pharmaceuticals generic injectables business.
Myriad considers response
Myriad confirmed it received notice of Javelin’s intention to terminate their merger agreement on April 12 and is considering its response to the news according to CEO Adrian Hobden.
Hobden said that: "We believe that the existing terms of the Merger Agreement between Myriad Pharmaceuticals and Javelin are fair to the shareholders of both companies and offer substantial long-term strategic value to the Javelin shareholders.”
"As we consider our response to this development over the five-business-day period available to us, our foremost priority will be to use our substantial financial resources prudently, including developing our promising portfolio of drug candidates."
When Myriad first tabled its bid last year it said that Javelin’s candidate non-steroidal post-operative pain drug Dyloject (diclofenac sodium for injection) was a “valuable addition” to its pipeline of cancer therapies, citing it as a key motivation for the deal.
Quite how valuable an addition Myriad considers Dyloject to be will be clear before Friday of this week when the contract mandated renegotiation period with Javelin elapses.