Tuesday, British drug giant GlaxoSmithKline plc (GSK), announced it has agreed to acquire Sirtris Pharmaceuticals Inc.(SIRT) for about US$720 million (or approx. GBP362 million) through a cash tender offer of US$22.50 (or approx. GBP11.33) per share.
Sirtris, which went public last May, priced its IPO at $10 a share, offering 6 million shares, raising a total of $62.4 million.
Under the agreement, a subsidiary of GlaxoSmithKline will commence a cash tender offer to purchase all of the outstanding shares of Sirtris, at US$22.50 per share followed by a second step merger in which any untendered Sirtris shares would be acquired at the same price per share. The offer represents a premium of 84% to Tuesday's closing price of Sirtris.
According to GlaxoSmithKline, the acquisition will significantly enhance its metabolic, neurology, immunology and inflammation research efforts by establishing a presence in the field of sirtuins, a recently discovered class of enzymes that are believed to be involved in the ageing process.
Sirtris Pharma is focused on the development of SIRT1 activators for the treatment of Type 2 Diabetes Mellitus. Sirtris will become part of GlaxoSmithKline's Drug Discovery organization, while continuing to operate from laboratories in Cambridge, Massachusetts as an autonomous drug discovery unit. Christoph Westphal, CEO and Vice Chair of Sirtris and the management team will continue to lead Sirtris. Glaxo intends to retain all Sirtris employees.
Early this month, the FDA granted Sirtris Pharma orphan-drug designation for resveratrol in the treatment of rare MELAS syndrome. MELAS is a progressive and fatal disorder with no known treatments. The earliest symptoms include muscle weakness, fatigue, recurrent headaches and seizures.
The acquisition has been approved by the board of directors of GlaxoSmithKline as well as Sirtris Pharma and is subject to customary closing conditions, including the tender of at least a majority of Sirtris' shares and clearance under the Hart-Scott-Rodino Antitrust Improvements Act. The tender offer is expected to commence in early May and close in the second quarter of 2008.
SIRT closed Tuesday's regular trade down 4.08% or $0.52 at $12.23 on a volume of 105,335 shares. However, in after-hours the stock gained 80.29% or $9.82 and was at $22.05.
GSK closed the day's trade up $0.33 at $43.73 on a volume of 3.07 million shares.
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