Spectrum Extends Allos Buyout Offer - Analyst Blog
21 Août 2012 - 12:00PM
Zacks
Recently, Allos
Therapeutics Inc. (ALTH) and Spectrum
Pharmaceuticals (SPPI) announced the extension of the
offer period for the purchase of the entire outstanding common
stock of the former. The offer period, which was set to expire on
August 20, 2012, has been extended until September 4, 2012 (5 PM
ET).
We note that the buyout offer was
extended to enable both companies to comply with the request of the
Federal Trade Commission for additional information regarding the
deal under the antitrust laws. The companies stated that as of
August 17, 2012, 59.9% of Allos’ outstanding shares had been
tendered. We note that the tender offer period has been extended
quite a few times previously too.
We remind investors that the deal
was announced in April 2012. Per the terms of the deal, Spectrum
Pharma will acquire Allos for $1.82 per share in cash, in addition
to one contingent value right (CVR). The CVR, which will not be
traded in the public domain, makes each Allos shareholder eligible
to receive a further $0.11 per share in cash depending on the
conditional European approval and achievement of certain milestones
of Allos’ sole marketed drug, Folotyn.
We remind investors that Folotyn is
available in the US for the treatment of patients with relapsed or
refractory peripheral T-cell lymphoma (PTCL). The drug is under
review in the EU for the indication.
Currently, Spectrum Pharma’s
product portfolio comprises two marketed products -Fusilev
(advanced metastatic colorectal cancer and for rescue in
osteosarcoma (a form of bone cancer) patients following treatment
with a high-dose of chemotherapy drug, methotrexate) and Zevalin
(for treating patients suffering from non-Hodgkin’s lymphoma).
The addition of Folotyn will
further strengthen the oncology portfolio at Spectrum Pharma. At
the time of announcing the deal, management at Spectrum Pharma
stated that both Zevalin and Folotyn target the same set of doctors
for treating different cancer forms. This makes the deal all the
more sound strategically.
Our
Recommendation
Currently, we have a Neutral
recommendation on Allos in the long run. However, we have an
Outperform recommendation on Spectrum Pharma. Both companies carry
Zacks #3 Ranks (“Hold”) in the short run.
ALLOS THERAPEUT (ALTH): Free Stock Analysis Report
SPECTRUM PHARMA (SPPI): Free Stock Analysis Report
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