Emergent BioSolutions Announces Plan to Implement Tax-Free Spin-Off of Biosciences Business Into a Separate Publicly-Traded Company
The new Biosciences company, to be named at a later date, will focus on providing novel oncology and hematology therapeutics to meaningfully improve patients' lives. The core technology of the Biosciences company will be its ADAPTIR platform applied to immuno-oncology.
"The proposed spin-off recognizes that our two operating divisions have evolved into distinct business and investment opportunities. The Biosciences spin-off establishes each as a pure play company with a focused strategy and enables each company to target investors attracted to its business profile," said
Strategic Rationale
Emergent believes that establishing the Biosciences business as a stand-alone public company offers a number of benefits. The spin-off will enable each company to:
- tailor business strategies to best address opportunities within its target market,
- enhance business focus and better align resources to achieve strategic priorities,
- pursue distinct capital structures and capital allocation strategies, and
- target investors attracted to its business profile.
The new Biosciences company will consist of certain assets currently in Emergent's Biosciences division, including:
- the ADAPTIR™ (modular protein technology) platform including bi-specific therapeutics based on Redirected T-cell Cytotoxicity (RTCC), a promising approach within immuno-oncology,
-
MOR209/ES414, a bi-specific therapeutic for metastatic castration resistant prostate cancer currently in Phase 1 clinical development in partnership with
MorphoSys AG , and - a commercial product portfolio consisting of IXINITY, WinRho, HepaGam B, and VARIZIG.
The Biosciences company will be well-positioned to:
- establish itself as a "pure play" biopharmaceutical company in the highly attractive immuno-oncology field,
- target investments and operations in the development of bi-specific therapeutics using the proprietary ADAPTIR platform technology,
- increase awareness of ADAPTIR's RTCC mechanism of action, and
- provide greater visibility into its innovative platform technology and product candidates for potential collaborators.
Emergent expects to provide the Biosciences company with a fixed cash contribution of
Emergent will retain the biodefense marketed products and development programs, platform technologies, and manufacturing infrastructure. Emergent will maintain its headquarters in
Emergent, with its focus on its core biodefense business, will be better positioned to:
- establish itself as a "pure play" company, recognized as a leader in the biodefense and emerging infectious diseases fields,
- enhance its financial returns and operating margins through the elimination of biosciences related R&D, sales, marketing and G&A costs, and
- allow greater flexibility in its capital allocation decisions.
Leadership
As stand-alone public companies, Emergent and the new Biosciences company will have separate management teams and boards of directors.
Upon completion of the spin-off,
"Marvin brings more than two decades of experience as a senior executive of prominent pharmaceutical and healthcare organizations," said Mr. Abdun-Nabi. "Having worked with Marvin on our board for five years, it is clear that his combination of leadership talents and business acumen will serve the new Biosciences company well as it strives to achieve the promise of its product portfolio and platform technology."
"Having witnessed the development of the biosciences business as an Emergent director, I am excited for the opportunity to grow this business as an independent public company by leveraging its innovative ADAPTIR technology in the highly-desirable immuno-oncology field," said Mr. White. "I look forward to working with the talented team within the new Biosciences company to advance its unique product candidates for the benefit of patients."
Additional details of the board and management team of the new Biosciences company will be provided at a later date.
Financial Guidance
Emergent expects to incur transaction-related expenses of
Additional Information and Next Steps
The transaction is intended to take the form of a tax-free distribution to Emergent's shareholders of common stock of a new publicly-traded Biosciences company. The stock distribution ratio and other matters, including the stock exchange on which the new Biosciences company's stock will be listed, will be determined at a later date. Emergent will continue to be listed on the
More details about the Biosciences company, including pro forma financial information, will be disclosed when the new Biosciences company files a Form 10 registration statement with the
The transaction will not require the approval of Emergent's shareholders. Obligations under the 2.875% Convertible Senior Notes due 2021 will remain with Emergent following completion of the transaction, subject to the conversion adjustments provided in the indenture governing the notes.
Emergent may, at any time and for any reason until the proposed spin-off is complete, abandon the spin-off or modify its terms and conditions.
Emergent is being advised by
Conference Call and Webcast Information
Company management will host a conference call on
| Live Teleconference Information: | Live Webcast Information: |
| Dial in number: 855-766-6521 | Visit www.emergentbiosolutions.com |
| International dial in: 262-912-6157 | and select the "Investors" section |
| Passcode: 78708197 | |
| Teleconference Replay: | Webcast Archive: |
| Dial in number: 855-859-2056 | Visit www.emergentbiosolutions.com |
| International dial in: 404-537-3406 | and select the "Investors" section |
| Passcode: 78708197 | |
| Available through August 20, 2015 | |
|
The company has posted a presentation regarding the transaction that is accessible via the following link: www.emergentbiosolutions.com/investors |
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About
Safe Harbor Statement
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements, other than statements of historical fact, including, without limitation, statements regarding the planned spin-off of our biosciences business, the timing of any such spin-off, the future earnings and performance of Emergent or any of its businesses, including the biodefense and biosciences businesses on a standalone basis if the spin-off is completed, and any other statements containing the words "believes", "expects", "anticipates", "intends", "plans", "forecasts", "estimates" and similar expressions in conjunction with, among other things, discussions of financial performance or financial condition, strategy, product sales, manufacturing capabilities, product development, regulatory approvals or expenditures are forward-looking statements. These forward-looking statements are based on our current intentions, beliefs and expectations regarding future events. We cannot guarantee that any forward-looking statement will be accurate. Investors should realize that if underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could differ materially from our expectations. Investors are, therefore, cautioned not to place undue reliance on any forward-looking statement. Any forward-looking statement speaks only as of the date of this press release, and, except as required by law, we do not undertake to update any forward-looking statement to reflect new information, events or circumstances.
There are a number of important factors that could cause the company's actual results to differ materially from those indicated by such forward-looking statements, including whether the planned spin-off of the biosciences business is completed, as expected or at all, and the timing of any such spin-off; whether the conditions to the spin-off can be satisfied; whether the operational, marketing and strategic benefits of the spin-off can be achieved; whether the costs and expenses of the spin-off can be controlled within expectations; and general market and economic conditions. The foregoing sets forth many, but not all, of the factors that could cause actual results to differ from our expectations in any forward-looking statement. Investors should consider this cautionary statement, as well as the risk factors identified in our periodic reports filed with the
CONTACT: Investor Contact:
Robert G. Burrows
Vice President, Investor Relations
240-631-3280
BurrowsR@ebsi.com
Media Contact:
Tracey Schmitt
Vice President, Global Public Affairs
and Corporate Responsibility
240-631-3394
SchmittT@ebsi.com
