Allos Therapeutics, Inc
) announced the extension of the offer period for the purchase of
the entire outstanding common stock of the former. The offer
period, which was set to expire on June 22, 2012, has been extended
until July 9 (5 PM ET).
We note that the buyout offer was extended to enable both companies
to comply with the request of the Federal Trade Commission for
additional information regarding the deal under the antitrust laws.
The companies stated that as of June 21, 57.6% of Allos'
outstanding shares had been tendered. This is the fourth extension
of the tender offer period.
Per the terms of the deal, announced in April 2012, Spectrum Pharma
is scheduled to acquire Allos for $1.82 per share in cash, in
addition to one contingent value right (CVR). The CVR, which will
not be traded in the public domain, makes each Allos shareholder
eligible to receive a further 0.11 per share in cash depending on
the conditional European approval and achievement of certain
milestones of Allos' sole marketed drug, Folotyn.
We remind investors that Folotyn is available in the US for the
treatment of patients with relapsed or refractory peripheral T-cell
lymphoma (PTCL). The drug is under review in the EU for the
At the time of announcing the deal, Spectrum Pharma and Allos had
stated that the deal was expected to close in the second quarter of
the year. However, the extension of the tender offer period makes
It was further announced that the deal is expected to result in
savings in the range of $40 -$50 million for Spectrum Pharma in
2013. The move is a smart strategic one by Spectrum Pharma as it
will further strengthen its product portfolio.
Currently, Spectrum Pharma's product portfolio comprises two
marketed products-Fusilev (advanced metastatic colorectal cancer
and for rescue in osteosarcoma (a form of bone cancer) patients
following treatment with a high-dose of chemotherapy drug,
methotrexate) and Zevalin (for treating patients suffering from
The addition of Folotyn will further strengthen the oncology
portfolio at Spectrum Pharma. At the time of announcing the deal,
management at Spectrum Pharma stated that both Zevalin and Folotyn
target the same set of doctors for treating different cancer forms.
This makes the deal all the more sound strategically.
Currently, we have an Outperform recommendation on Spectrum Pharma
in the long-run. The company carries a Zacks #2 Rank ("Buy" rating)
in the short run.
ALLOS THERAPEUT (ALTH): Free Stock Analysis
SPECTRUM PHARMA (SPPI): Free Stock Analysis
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