Allos Therapeutics ($ALTH) announced this morning that a merger agreement with AMAG ($AMAG) has been was terminated. The termination comes after a special meeting of AMAG stockholders, who voted against the issuance of shares of the company's common stock to Allos' shareholders.
Under the deal, which was announced in July, AMAG and Allos would merge in an all-stock transaction valued at $686 million. AMAG's shareholders would have held 61% of the shares, with Allos shareholders getting the rest. Many analysts were puzzled by the proposal. The Street's Adam Feuerstein dubbed it perhaps "the nuttiest, most nonsensical business combination in biotech history."
Feuerstein went on to say the only thing the two companies have in common is "they've largely failed initial efforts to sell their respective drugs, neither of which have anything to do with each other." He viewed AMAG's launch of Feraheme, an iron replacement therapy, and Allos' commercial attempts with its lymphoma drug Folotyn as disappointing.
The deal also faced opposition from MSMB Capital Management, which had encouraged AMAG stockholders to vote against the merger. In a strongly worded statement issued this week, MSMB Chief Investment Officer Martin Shkreli blasted the deal, as well as the AMAG board. "Over the past four years, the AMAG board of directors, presided over an 80% decline in the value of AMAG stock, granted Dr. Pereira a $100,000 raise and massive change of control payment despite management falling 'well short' of meeting the performance goals of the board and approved a value-destroying transaction." Shkreli emphasized. "As Allos acknowledged on Friday, Dr. Pereira, Mr. Narachi and Paul Berns, the Allos Chief Executive Officer, have a long-standing personal relationship and it is possible that such relationship clouded Dr. Periera's and Mr. Narachi's judgment in negotiating the transaction with Allos."
Back in August, MSMB sought to scuttle the Allos-AMAG merger by offering to buy the latter company for $378 million.
Allos' stockholders held a more sanguine view of the deal, with a majority voting in favor of the merer agreement at a special meeting today.
- check out Allos' release
- take a look at AMAG's take
- read MSMB's statement