YM BioSciences plans to acquire Cytopia
2009-10-05 18:58 ET - News Release
Mr. David Allan reports
YM BIOSCIENCES ANNOUNCES OFFER FOR CYTOPIA LTD., AN AUSTRALIAN CANCER-FOCUSED DEVELOPMENT COMPANY
YM BioSciences Inc. has proposed to merge Cytopia Ltd., a clinical-stage, Melbourne-based drug development company, into YM. Cytopia's lead products are CYT997, a novel vascular disrupting agent (VDA) currently in phase II trials, and CYT387, a novel, orally active JAK2 inhibitor that recently received clearance from the FDA to commence a phase I trial in myeloproliferative disorders.
"After assessing numerous global in-licensing opportunities, we determined that Cytopia's products were an ideal complement to our current portfolio," said David Allan, chairman and chief executive officer of YM BioSciences. "While the continued development of our lead product nimotuzumab remains our highest priority, we believe the timing is appropriate to expand our pipeline, consistent with our business model, leveraging our existing resources and expertise to select from the opportunities offered to us in order to continue to enhance the value of YM."
Cytopia's lead product, CYT997, has demonstrated potent disruption of existing tumour vasculature and therefore has the potential to synergize with existing marketed anti-angiogenesis agents, such as Avastin, which only target novel blood vessel formation. CYT997's availability in both oral and intravenous formulations differentiates it from most other VDAs, including those more advanced in clinical development, which are typically available in intravenous form only. Phase I trial results from the intravenous formulation of CYT997 were presented at ASCO in 2008 and results from the phase I oral study were presented at ASCO 2009 demonstrating that both formulations were well tolerated and showed preliminary signs of efficacy as determined by measures of tumour vasculature disruption. In the intravenous study, 17 of 22 evaluable end-stage patients enrolled in the 31-patient trial achieved stable disease over four cycles of therapy. In the oral study, CYT997 demonstrated good absorption and linear dosing with 12 of 21 patients showing stable disease over six weeks.
"We believe that CYT997, with its dual mechanisms of vascular disruption and cytotoxicity, has the potential to be broadly active against a range of tumour types," said Andrew Macdonald, chief executive officer of Cytopia. "It acts similarly to other tubulin-binding agents, such as paclitaxel and vincristine, by directly affecting tumour cell replication, but also by shutting down the tumour vasculature, essentially starving the tumour cells. We are very pleased that our two promising cancer drugs will progress their clinical studies within a strong and capable organization."
A phase II study in highly vascular tumour indications is continuing in Australia in patients with relapsed glioblastoma multiforme (GBM, glioma), an aggressive form of brain tumour, with CYT997 being administered intravenously in combination with carboplatin every three weeks. Patients are being monitored for changes in their tumours as well as for progression-free survival. The company is also conducting a phase II program in relapsed or refractory multiple myeloma.
Cytopia's other product, CYT387, recently received clearance from the FDA to begin a phase I trial in patients with myeloproliferative disorders (MPD). CYT387 is an oral JAK1/2-inhibitor that targets a signaling pathway known to play a key role in the development of MPDs and in the proliferation of certain types of cancer cells such as prostate, breast and liver cancers, and the hematological cancer, multiple myeloma.
In preclinical studies, using samples derived from MPD-diseased patients, CYT387 has shown promising activity in suppressing the overactivity of the mutant JAK2 enzyme. MPD diseases, including polycythemia vera (PV) and essential thrombocythemia (ET), are highly debilitating disorders for which there are limited and poorly efficacious therapeutic options. The principal investigator for the planned phase I study will be Dr. Ayalew Tefferi, professor of medicine in hematology at Mayo Clinic, and a key opinion leader in MPD.
Cytopia shareholders are being offered 0.0852 common share of YM in exchange for each common share of Cytopia. This offer is based on the volume weighted average price (VWAP) of YM shares for a recent 20-trading-day period and incorporates a 30-per-cent premium to CYT's recent 20-day VWAP . The transaction would result in YM issuing approximately 7.2 million new shares. The offer is subject to certain conditions and the consideration is subject to certain adjustments in the number of YM shares designed to largely preserve the agreed value of the offer notwithstanding possible share price fluctuations.
This transaction will be conducted through a court-supervised scheme of arrangement with a minimum threshold of at least 75 per cent of Cytopia shares and half the shareholders who vote, voting for the scheme. Following this announcement, scheme documentation fully describing the transaction will be distributed by Cytopia to its shareholders, including a fairness opinion prepared by an independent expert. It is anticipated that the circular will be distributed in November, 2009, and that the meeting of shareholders will occur in January, 2010. The transaction is also contingent on receiving all necessary regulatory and stock exchange approvals, including approval by the Toronto Stock Exchange. Bloom Burton & Co. assisted YM with certain elements of the transaction.
YM's lead drug, nimotuzumab, is currently approved in 21 countries around the world. As a consequence of YM's acquisition of Cytopia, the company expects to open clinical trials of nimotuzumab in Australia subject to clearance by the Australian health regulatory authority and to supply nimotuzumab to individual patients in Australia through a special access scheme (SAS) that has already been launched.
Notice of conference call
YM BioSciences will host a conference call for analysts and portfolio managers to discuss this proposed transaction on Tuesday, Oct. 6, 2009, at 8 a.m. (Eastern Time). The call may be accessed by calling 1-416-644-3424 or 1-800-594-3790. The conference call will also be audiocast live and archived for 90 days on the company's website.
We seek Safe Harbor.