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Lantheus to buy Progenics to chase both cancer imaging diagnostics and drugs

October 3, 2019
Life sciences

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Lantheus, makers of diagnostic imaging hardware and nuclear medicine agents, has moved to acquire cancer drugmaker Progenics Pharmaceuticals in an all-stock transaction.

The new company aims to combine Lantheus’ manufacturing and supply chain background with Progenics’ clinical R&D pipeline and its portfolio of FDA-approved products—including Azedra, a treatment approved last year for the rare orphan indications pheochromocytoma and paraganglioma.

Progenics’ other approved products are oral and subcutaneous formulations of Relistor, for opioid-induced constipation in patients with terminal illness, which have been licensed to Bausch Health.

Meanwhile, Lantheus brings along its microbubble franchise of cardiovascular ultrasound contrast agents, as well as radiopharmaceuticals used in cancer diagnostics. The new company will also offer a 510(k)-cleared artificial intelligence platform in oncology.

“With this combination, we broaden our reach in emerging uses of radioisotopes for precision diagnostics and the exciting and expanding field of radiopharmaceuticals in oncology treatment,” Lantheus President and CEO Mary Anne Heino said in a statement, describing a focus in diagnosing and treating neuroendocrine tumors and prostate cancer.

“We have assessed the strategic fit with Progenics for a number of years and I am pleased that we are finally able to make this combination come to fruition; I believe that the combined company will be well-positioned for long-term value creation for all of our stockholders,” said Heino, who will lead the company going forward, headquartered out of Lantheus’ home in North Billerica, Massachusetts.

Under the deal, Lantheus’ holding company will purchase all of Progenics’ issued and outstanding common shares—in exchange for 0.2502 shares of Lantheus stock for each—which will represent about a 35% ownership stake in the combined venture going forward. According to the companies, the two had a pro forma combined revenue of $370.1 million for the 12 months preceding June 30.

Lantheus said the exchange ratio comes to a 21.5% premium over Progenics’ average closing stock price. However, Lantheus’ stock plunged at least 20% following news of the deal to about $18.80. The deal has been approved by the boards of both companies.

“Today marks the beginning of an exciting new chapter for Progenics,” said CEO Mark Baker. “Lantheus shares our confidence in the potential of our promising pipeline, and we believe that Lantheus will provide additional commercialization expertise and resources to further advance Azedra’s launch and deliver substantial revenue growth.”

The transaction is expected to close in the first quarter of 2020, subject to approval by both companies’ stockholders and regulators.

By Conor Hale

Source: Fierce Biotech

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