EUSA to acquire U.S. oncology company

Register for free to listen to this article
Listen with Speechify
OXFORD, England—EUSA Pharma Inc., a transatlantic specialty pharmaceutical company focused on oncology, pain control and critical care, has entered into a definitive agreement to acquire all the outstanding shares of Doylestown, Penn.-based Cytogen Corp. for $22.6 million. Cytogen is a specialty pharmaceutical company with three oncology and pain control products on the American market, with a specialist U.S. sales force and an established commercial infrastructure.
To meet the acquisition consideration, and fund further investments, EUSA Pharma has concurrently raised over $50 million in an investment round, led by TVM Capital, an international venture capital firm.

"The acquisition of Cytogen is of great strategic importance for EUSA as it completes the building of our transatlantic commercialization infrastructure, as well as fitting perfectly with our focus on oncology and pain control," says Bryan Morton, chief executive of EUSA Pharma. "Over the last 18 months, EUSA has built a strong European organization covering over 20 countries and marketing a portfolio of six specialty pharmaceuticals. Cytogen's products and U.S. infrastructure are the ideal complement to our business, offering us the opportunity to commercialize a rapidly growing portfolio of medicines on both sides of the Atlantic."

"The acquisition of Cytogen marks a step change in the growth of EUSA and completes the foundations of a world-class specialty pharmaceutical company. This transaction will transform our business, putting in place a truly transatlantic growth platform, and positioning the company as the partner of choice for future acquisitions and specialty product in-licensing," adds Rolf Stahel, chairman of EUSA Pharma.

Recounting the strategic rationale for the move, EUSA notes that the acquisition of Cytogen brings to the enlarged EUSA group an established U.S. commercial organization with a 40-strong specialist oncology sales force and three marketed products.

One of those products is Caphosol, a supersaturated calcium phosphate rinse indicated for the treatment of oral mucositis—a common and debilitating side-effect of radiation therapy and high-dose chemotherapy—and for the treatment of xerostomia. The second is ProstaScint, a monoclonal antibody-based agent used to image the extent and spread of prostate cancer. And the third is Quadramet, a radiopharmaceutical for the treatment of pain in patients whose cancer has spread to the bones.

The enlarged group will also have broad sales and marketing capabilities via direct sales forces in the United States and across Europe, and through distribution partners in a number of territories including Canada, South America and Asia. EUSA will have a portfolio of nine marketed medicines and five late-stage development products. The acquisition of Cytogen provides EUSA with the capabilities to commercialize a number of these medicines on both sides of the Atlantic.

In addition, the enlarged group's transatlantic infrastructure provides the company with a strategic growth platform to exploit additional products through acquisition and in-licensing. With its highly focused business model, EUSA will have the opportunity to compete with major players, making it an attractive partner for companies seeking specialist transatlantic commercial and late-stage development expertise.

Under the terms of the all-cash merger agreement Cytogen shareholders will receive $0.62 per share, representing a 35 percent premium on the company's share price at the close of trading on March 10, 2008.

The Cytogen board approved the cash merger agreement and resolved to recommend that the company's shareholders adopt the agreement. Completion of the acquisition is conditional on the approval of a majority of Cytogen's shareholders and fulfillment of certain pre-closing conditions. Upon completion, EUSA intends to apply to delist all Cytogen's issued shares from the NASDAQ stock exchange.

During 2007, Cytogen's revenues totaled $20.2 million, with the company making a net loss of $25.7 million for the year. At the end of December 2007 the company held cash and cash equivalents totaling $8.9 million. During 2007, Cytogen began a program to refocus its strategy, reduce costs and promote its products more effectively by building on its expertise in the oncology field. EUSA intends to accelerate this initiative and rapidly drive the business to profitability, while retaining the strengths of the Cytogen organization.

Subscribe to Newsletter
Subscribe to our eNewsletters

Stay connected with all of the latest from Drug Discovery News.

January 2024 DDN Magazine Issue

Latest Issue  

• Volume 20 • Issue 1 • January 2024

January 2024

January 2024 Issue