The Medicines Company to acquire Targanta Therapeutics

Under the terms of the merger agreement, Targanta shareholders will receive $2 in cash up front for each common share tendered, or approximately $42 million. Targanta shareholders may also be entitled to receive additional contingent cash payments upon the achievement of specified regulatory and commercial milestones within agreed upon time periods.

The transaction has been approved by the boards of directors of both companies, and Targanta’s board of directors has recommended that Targanta’s shareholders tender their shares into the tender offer, adopt the merger agreement and approve the merger.

The tender offer, if successful, will be followed by a second-step merger in which any shares of Targanta not tendered into the offer will be converted into the right to receive the same per share consideration paid to Targanta shareholders in the tender offer. The Medicines Company has entered into agreements with Targanta shareholders representing approximately 36% of the voting shares outstanding to tender their shares in the tender offer.

Glenn Sblendorio, executive vice president and CFO of The Medicines Company, said: We believe that this transaction can create significant value for our shareholders and further expand our portfolio of critical care products. It adds a late stage product, with global rights, and the potential for near-term revenue, and could contribute significantly to our long-term growth. Oritavancin is a well-characterized Phase III asset.

We believe the deal terms reflect a balanced investment to expand our product portfolio and we agreed to pay for the transaction with cash to avoid share dilution. The addition of staged payments provides Targanta shareholders additional value if milestones are achieved and mitigates risk for The Medicines Company.