The transaction, with a net aggregate purchase price of approximately $190 million after deducting Kosan’s projected net cash balance at June 30, 2008, has been unanimously approved by the boards of directors of both companies. The acquisition of Kosan will enhance Bristol-Myers Squibb’s pipeline with compounds in two important classes of anticancer agents: novel Hsp90 (heat shock protein 90) inhibitors and epothilones.
Under the terms of the definitive merger agreement, Bristol-Myers Squibb has commenced a cash tender offer to purchase all of the outstanding shares of Kosan common stock for $5.50 per share in cash. The closing of the tender offer is subject to customary terms and conditions, including the tender of a number of shares that constitutes at least a majority of Kosan’s outstanding shares of common stock (on a fully diluted basis) and expiration or termination of the waiting period under the Hart Scott Rodino Antitrust Improvement Act.
Bristol-Myers Squibb and Kosan also announced that they have entered into a separate license agreement under which Kosan has granted to Bristol-Myers Squibb an exclusive worldwide license to Kosan’s epothilone compounds and related intellectual property and data and will assign to Bristol-Myers Squibb its epothilone investigational new drug applications.
Under the license agreement, Kosan will receive an initial payment of $25 million and is entitled to milestone payments in connection with the development of epothilone product candidates and royalty payments on net sales of such products. The license agreement will remain in effect between the parties in the event that the acquisition is not completed, unless the merger agreement is terminated due to an intentional breach by Bristol-Myers Squibb of its covenants under that agreement.