Facing legal troubles and declining sales, Aegerion to merge with Canadian QLT
- Troubled biotech Aegerion Pharmaceuticals will merge with the Canadian QLT Inc., creating a new company called Novelion Therapeutics, the company said Wednesday.
- Following completion of the merger, QLT shareholders will own 67% of shares in Novelion, while Aegerion shareholders will hold the remaining 33% stake. The new company will be headquartered in Vancouver, although its business operations will be conducted in Cambridge, MA.
- In February, Aegerion laid off 80 workers, or roughly 25% of its staff, in an attempt to save costs as it faced legal challenges related to its main product Juxtapid. The company pleaded guilty to two misdemeanor violations for misbranding the drug last month and will pay $40 million to the U.S. government.
A group of new investors and existing shareholders of the two companies will boost the resources of the new company with a $22 million investment.
Both company's board of directors have approved the transaction, which will see Aegerion merged with a wholly-owned indirect subsidiary of QLT. Each outstanding share of Aegerion will be converted for 1.0256 shares of QLT common stock and QLT stock will be traded under the name of the new company Novelion.
Aegerion CEO Mary Szela will serve as CEO of Novelion and called the merger a "fresh start." Novelion plans to continue marketing Juxtapid and Aegerion's other drug Myalept, while pursuing late-stage development of QLT's experimental drug for inherited retinal disease (IRD).
'The QLT board determined that it would be advantageous to join forces with a strategic partner possessing the relevant orphan product infrastructure," said Geoffery Cox, interim CEO at QLT.
The new company faces steadily declining sales of Juxtapid, which accounted for nearly 90% of Aegerion's revenue last year. There were only 615 patients actively taking Juxtapid globally in December 2015, and that number has declined further.
Aegerion has said it expects between $130 million and $160 million in 2016 sales of Juxtapid.
The companies expect the merger to close sometime late in the third quarter, or early in the fourth.
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