Epix Pharmaceuticals has sold the U.S., Canadian and Australian rights for its blood pool MR angiography (MRA) agent, Vasovist, to Lantheus Medical Imaging for aggregate gross cash proceeds of $28 million. In addition, if Epix is unable to exchange all of its $100 million aggregate principal of 3 percent of convertible senior notes, it may be forced to file bankruptcy.
The acquisition of Vasovist (MS-325) further builds on Lantheus' diagnostic imaging product portfolio and expands the company's presence to the radiology market. Lantheus said it is planning to launch MS-325 under a different name before the year-end.
"As a first-in-class contrast agent, MS-325 provides a true advance in vascular imaging, and may make it possible for physicians to detect peripheral vascular disease differently than x-ray angiography, which is invasive," said Don Kiepert, president and CEO of Lantheus.
Under the terms of the offer, Epix said it will issue in exchange for each $1,000 in principal amount of notes properly tendered and accepted for exchange a cash payment of $180, 339 shares of common stock and one contingent value right (CVR). Subject to certain exceptions, each CVR represents a contractual right to receive additional payments if, within nine months after completion of the offer or earlier in certain circumstances, the company consummates any future repurchase of notes not tendered in the offer at a value that exceeds that offered, the company said.
"We intend to use the net proceeds of this transaction to pursue an exchange offer of all of our outstanding 3 percent senior convertible notes, which we are announcing separately today. We believe that this transaction with Lantheus, when coupled with a successful restructuring of our outstanding debt, will position us well to strengthen our balance sheet and overall financial position," said Elkan Gamzu, PhD, president and CEOP of Epix.
If all notes are tendered in the exchange offer, the noteholders would receive $18 million and an aggregate of 33,900,000 common shares, representing approximately 44.7 percent of the total outstanding common stock of Epix immediately following consummation. The company currently has 41,947,441 shares of common stock outstanding.
Epix said it will continue to own European and other non-U.S. rights for the imaging agent enabling it to pursue further monetization of these rights. The company will pay $10.5 million of the cash proceeds from the transaction to Bayer Schering Pharma AG, Germany, to satisfy its obligations related to U.S., Canadian and Australian Vasovist development costs. Epix and Bayer Schering Pharma had a collaboration and commercialization agreement for Vasovist that ended Feb. 28.