CancerVax, Micromet to merge

By Ted A. Knutson

Washington, Jan. 9 - CancerVax Corp., a biotechnology company focused on the research, development and commercialization of novel biological products for the treatment of cancer, and Micromet AG, one of the leading privately held European biopharmaceutical companies focused on the development of antibody-based drugs, announced Monday they will merge with the new company being called Micromet, Inc.

The merger is expected to close in the second quarter of 2006.

The merger is expected to create a transatlantic company with a highly differentiated drug development pipeline focused on oncology, autoimmune and inflammatory diseases, and a strong, proprietary technology base for the development of antibody-based product candidates.

The merged company will have two compounds in clinical development in three major cancer indications and several preclinical and research-stage product candidates.

Under the merger, Micromet stockholders will own about 67.5% of the combined company and CancerVax stockholders will own about 32.5%. The merger agreement has been approved by both boards of directors and will need to be approved by each company's stockholders.

"We believe that the proposed merger of CancerVax and Micromet is consistent with our objective of maximizing value for our stockholders, and will result in an organization with a robust pipeline of drug candidates as well as significant experience in drug discovery and development," said David F. Hale, president and chief executive officer of CancerVax, in a news release.

"This transaction will allow Micromet to access U.S. capital markets, which is essential in our efforts to accelerate the development of our novel, antibody-based drug compounds based on our proprietary BiTE, or bi-specific T cell engager, and single-chain antibody drug development platforms," said Christian Itin, Ph.D., chief executive officer of Micromet, in the same announcement. "It also strengthens our management team and financial position, allows us to leverage CancerVax's existing U.S. public company infrastructure, and adds to our product development portfolio."

Hale will become chairman of the board of directors of the merged company. Itin, will become president and chief executive officer and serve on the board.

It is anticipated that, on a pro forma basis, cash, cash equivalents and securities available-for-sale for the combined companies as of Dec. 31 will be between $57 million and $60 million.

Following the closing, the merged company's U.S. headquarters will be in Carlsbad, Calif., the current CancerVax headquarters, while the firm's German headquarters will remain in Munich, Germany, currently the headquarters for privately held Micromet. Research and development will be consolidated in Munich.

Upon closing of the transaction, the company's shares are expected to continue to trade on the Nasdaq National Market. CancerVax will be renamed as Micromet, Inc., and application will be made to Nasdaq to change the ticker symbol to "MITI."

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