The northern Minnesota drug company ANI Pharmaceuticals on Thursday announced a deal in which it will absorb a suburban Chicago pharmaceutical firm.
The deal will combine Baudette-based ANI's branded and generic drugs portfolio with BioSante Pharmaceuticals' cash and expected licensing deals. The new company will be called ANI Pharmaceuticals, and the ANI management team, including CEO Arthur Przybl, will run the new company.
ANI reported about $16 million in revenue in 2011. BioSante, which has two FDA-approved products -- an estrogen gel for women and a testosterone gel for men -- has virtually no revenue, said Stephen Simes, president and CEO of BioSante.
The company has been working for years to develop a LibiGel, a testosterone gel to treat sexual dysfunction in menopausal women.
BioSante is publicly traded, but shares have lost almost half their value this year. They closed Thursday down 20 cents at $1.60.
Officials said the all-stock transaction will be worth about $94 million. Shareholders of ANI, which is now privately held, will control about 53 percent of the combined company, and BioSante's stockholders will have 47 percent.
Simes said on Thursday that the deal is expected to close by mid-February. He added that ANI's revenue will help support BioSante's continued efforts to get LibiGel through clinical trials and to market.
In the merger agreement, BioSante will distribute contingent value rights to current shareholders. Those rights mean that BioSante shareholders would get 66 percent of any income from future sales of LibiGel, up to $40 million, and 47 percent of whatever comes in after that. Those rights are good for 10 years.
Until now, BioSante has been stymied in its efforts to win FDA approval for LibiGel, when the product failed two clinical trials and did not perform better than a placebo.
BioSante was founded in 1996, Simes said. ANI markets FDA-approved generic versions of a number of treatments, including for obsessive compulsive disorder, hormone replacement drugs and others.
ANI management will take over the combined company, Simes said. All manufacturing operations will be moved to ANI's two Baudette factories. All BioSante employees will leave the company between now and the closing of the merger, Simes said.
James Walsh 612-673-7428