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Nabi Biopharmaceuticals to merge with Biota Holdings

Monday, April 23 2012 | Comments
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Rockland, Md.-based Nabi Biopharmaceuticals and Melbourne, Australia-based Biota Holdings Ltd. entered into a definitive merger agreement to form a new company that will be called Biota Pharmaceuticals Inc.

Under the terms of the agreement, Nabi will acquire all outstanding ordinary shares of Biota in exchange for newly issued shares of Nabi common stock. After the merger, Nabi will be renamed Biota Pharmaceuticals and will remain a Nasdaq-listed company. The combined company will have its headquarters in the United States.

After the merger, the shares of Nabi common stock issued to former Biota shareholders will represent approximately 74 percent of the outstanding stock of the combined company, and shares held by Nabi shareholders will represent approximately 26 percent.

The new company's board of directors will consist of six members from Biota's current board and two members of Nabi's current board. Biota's current chief executive officer and chief financial officer will serve in those same offices at the new firm.

According to the firms, the new company's royalty-generating products will include zanamivir, a first-in-class neuraminidase inhibitor developed by Biota that GlaxoSmithKline Plc (GSK) markets in the United States and elsewhere as Relenza to treat and prevent influenza; laninamivir octanoate, a long-acting anti-influenza neuraminidase inhibitor that Biota co-owns with Daiichi Sankyo Co. Ltd., which Daiichi Sankyo markets in Japan under the brand name Inavir; and possibly PhosLyra (calcium acetate), a phosphate binder Fresenius Medical Care North America markets for patients with end-stage renal disease.

The new firm's clinical programs will include vapendavir, Biota's investigational treatment for human rhinovirus infections in patients with compromised respiration or immune systems that is about to enter Phase III development. Biota also has a $231 million contract with the Biomedical Advanced Research and Development Authority for the development of laninamivir in the United States.

The combined company will also have an interest in Nabi's Nicvax (nicotine conjugate), an investigational vaccine for the treatment of nicotine addiction and prevention of smoking relapse. In 2009, Nabi granted GSK Biologicals SA an option to exclusively in-license Nicvax on a worldwide basis and a license to develop follow-on nicotine vaccines using Nabi's intellectual property. GSK can exercise its option after the vaccine has completed two Phase III trials. Nabi reported last July that Nicvax failed to meet the primary endpoint in one of those trials.

In addition, the newly formed Biota Pharmaceuticals will have an interest in several preclinical programs, including potential treatments for respiratory syncytial virus and hepatitis C virus and a broad-spectrum antibiotic, as well as more than $100 million in cash to develop its pipeline.

The transaction is expected to close in the third quarter. Both companies' boards of directors have endorsed the merger as being in the best interest of the shareholders.

Nabi shares closed at $1.66, down $0.20, or 10.5 percent in heavy volume on the Nasdaq.

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