Cephalon is required to pay an additional $40 million of cash payments upon the achievement of certain regulatory milestones. At the close of the transaction, Salmedix is expected to have approximately $25 million in cash on hand, net of transaction-related expenses.
Salmedix’s most advanced product, Treanda (bendamustine hydrochloride), is currently in phase II clinical trials in the US and Canada for the treatment of indolent (slowly progressing) non-Hodgkin’s lymphoma (NHL), a type of hematologic malignancy.
One ongoing phase II study is evaluating the use of Treanda as a single agent in patients with NHL who are refractory to Genentech and Biogen Idec’s Rituxan (rituximab). A second on-going study is evaluating Treanda in combination with rituximab in patients who are potentially sensitive to rituximab.
In addition to Treanda, Salmedix has two other product candidates in phase II clinical development.
“We are excited about Treanda and its addition to our oncology portfolio,” said Dr Frank Baldino, chairman and CEO of Cephalon. “This acquisition, along with encouraging data from our on-going studies of CEP-701 in acute myelogenous leukemia, gives us the opportunity to advance our entry into the oncology marketplace with multiple product candidates.”
The merger is expected to close in the second quarter of 2005, subject to customary closing conditions, after which Salmedix will become a wholly-owned subsidiary of Cephalon. Cephalon expects the transaction to be $0.10-0.15 per share dilutive to its 2005 earnings and plans to reissue 2005 earnings guidance when the transaction closes.