Allos Therapeutics, Inc. (MM) (NASDAQ:ALTH)
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Allos Therapeutics Announces $50 Million Financing
WESTMINSTER, Colo., March 3 /PRNewswire-FirstCall/ -- Allos Therapeutics, Inc.
(NASDAQ:ALTH) announced today that it has entered into a definitive securities
purchase agreement with Warburg Pincus Private Equity VIII, L.P., a Delaware
limited partnership ("Warburg Pincus"), for the sale of $50 million of
exchangeable preferred stock, at a purchase price of $22.10 per share. The
purchase price represents a 7.5% discount to the 20-day trailing average
closing price of the Company's common stock on the Nasdaq National Market,
calculated on an as-exchanged for common stock basis. The closing, which is
expected to occur tomorrow, March 4, 2005, is subject to certain customary
closing conditions, including receipt of any necessary regulatory approvals. In
addition, at any time on or before March 8, 2005, the Company has the right to
sell up to an additional $10 million of exchangeable preferred stock to not
more than three institutional investors each owning more than four percent of
the Company's common stock, subject to certain limitations on the amount of
exchangeable preferred stock each institutional investor is entitled to
purchase. Needham & Company, Inc. acted as the Company's exclusive placement
agent for the transaction.
The Company plans to use the proceeds from the financing to fund its ongoing
research and development activities, including the ongoing pivotal Phase 3
trial of its lead product candidate, EFAPROXYN(TM) (efaproxiral), in patients
with brain metastases from breast cancer (ENRICH), and for working capital and
general corporate purposes. In conjunction with the financing, the Company
also announced that Stewart Hen and Jonathan Leff, both Managing Directors of
Warburg Pincus, will join the Company's Board of Directors upon the closing of
the financing.
"We welcome Warburg Pincus as a significant investor in Allos and to our Board
of Directors," said Michael E. Hart, President and CEO. "We believe the
proceeds from this financing will provide the necessary resources to complete
our ongoing ENRICH study and to advance our PDX and RH1 development programs."
"We are very pleased to be joining with the Allos team to help advance the
Company's oncology programs," said Jonathan Leff, Managing Director, Warburg
Pincus. "We believe that EFAPROXYN has the potential to meet a very
significant unmet medical need. With this substantial commitment of capital to
the Company, we look forward to the continued development of this important
product."
Terms of the Financing
The exchangeable preferred stock will be issued under the Company's shelf
registration statement on Form S-3 (File No. 333-113353), declared effective by
the Securities and Exchange Commission on April 21, 2004. Upon the approval of
the Company's stockholders on or before the fifteen-month anniversary of the
closing date, each share of exchangeable preferred stock will be automatically
exchanged for ten shares of the Company's common stock. The Company intends to
seek stockholder approval of such exchange at its 2005 Annual Meeting of
Stockholders, which is tentatively scheduled for May 2005.
If the exchangeable preferred stock remains outstanding, beginning on the first
anniversary of the closing date, the exchangeable preferred stock will accrue
dividends at the rate of 10% per annum, compounded quarterly. Following the
later of the fourth anniversary of the closing date or thirty days after public
announcement of the results of the ENRICH trial, the Company and the holders of
a majority of the outstanding shares of exchangeable preferred stock will each
have the right to cause the Company to redeem the exchangeable preferred stock
for cash in a per share amount equal to the greater of (i) the purchase price
per share plus all accrued but unpaid dividends through the date of redemption
and (ii) ten times the fair market value of a share of the Company's common
stock on the date of redemption (the "Redemption Price"). In addition, upon
any liquidation or change in control of the Company, the holders of
exchangeable preferred stock will have the right to cause the Company to redeem
the exchangeable preferred stock for cash in a per share amount equal to the
Redemption Price, in the case of a liquidation, or the greater of (i) the
purchase price per share plus all accrued but unpaid dividends and (ii) ten
times the fair market value of the consideration received per share of common
stock, in the case of a change in control. The exchangeable preferred stock
will generally have no voting rights, except as required by law and subject to
the right of its holders to consent to any amendment of its terms.
In connection with the financing, Warburg Pincus will become subject to certain
standstill agreements relating to the acquisition of additional equity
securities of the Company, and certain voting agreements relating to the
election or removal of the Company's Board of Directors. In addition, Warburg
Pincus will be entitled to a right of first refusal with respect to certain
future issuances of equity securities by the Company, and certain registration
rights with respect to future sales of common stock of the Company held by
Warburg Pincus.
This announcement is neither an offer to sell nor a solicitation of an offer to
buy shares of the Company's exchangeable preferred stock. Further, this
announcement is only a description of the terms of the exchangeable preferred
stock and is not a solicitation of a proxy to approve the exchange of the
exchangeable preferred stock for shares of common stock of the Company.
Information concerning the exchange will be included in a proxy statement to be
furnished to the Company's stockholders in connection with the 2005 Annual
Meeting of Stockholders.
Conference Call
The Company will host a conference call to discuss the financing and review its
2004 financial results, which the Company announced separately, on Thursday,
March 3, 2005, at 11 AM ET. The dial in number for U.S. residents to
participate is 877-407-9210. International callers should dial
+1-201-689-8049. Participants should reference the Allos Therapeutics
conference call.
Conference Call Replay
An audio replay of the conference call will be available from 2 PM ET on
Thursday, March 3, 2005, until 11:59 PM ET on Thursday, March 10, 2005. To
access the replay, please dial 877-660-6853 (domestic) or +1-201-612-7415
(international); Replay pass codes (both required for playback): account #:
286, conference ID #: 140780.
About Allos Therapeutics, Inc.
Allos Therapeutics, Inc. is a biopharmaceutical company focused on developing
and commercializing innovative drugs for improving cancer treatments. The
company's lead clinical candidate, EFAPROXYN, is a synthetic small molecule
that has the potential to sensitize hypoxic (oxygen deprived) tumor tissues and
enhance the efficacy of standard radiation therapy. In addition, Allos is
developing PDX (pralatrexate), a novel small molecule cytotoxic injectable
antifolate (DHFR inhibitor) intended to treat non-small cell lung cancer and
non-Hodgkin's lymphoma, as well as RH1, a targeted cytotoxic prodrug under
investigation in patients with advanced solid tumors. For more information,
please visit the company's web site at: http://www.allos.com/.
About Warburg Pincus
Warburg Pincus is a global private equity firm and a leading investor in
healthcare, biotechnology and specialty pharmaceuticals. Since 1971, Warburg
Pincus has sponsored ten private equity investment funds with committed capital
in excess of $19 billion. The firm is currently investing its eighth global
fund, Warburg Pincus Private Equity VIII, which had a final closing in 2002 at
$5.3 billion. Warburg Pincus has invested more than $1.2 billion in the
biotechnology industry and helped to build more than 40 biotechnology and
biopharmaceutical companies spanning a broad range of technologies and stages
of development. For more information, please visit
http://www.warburgpincus.com/.
Safe Harbor Statement
This press release contains forward-looking statements that are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements include statements concerning the
anticipated date of closing of the financing, the potential to complete our
ongoing ENRICH study with the proceeds of the financing, the potential safety
and efficacy of EFAPROXYN, and other statements which are other than statements
of historical facts. In some cases, you can identify forward-looking
statements by terminology such as "may," "will," "should," "expects,"
"intends," "plans," anticipates," "believes," "estimates," "predicts,"
"projects," "potential," "continue," and other similar terminology or the
negative of these terms, but their absence does not mean that a particular
statement is not forward-looking. Such forward-looking statements are not
guarantees of future performance and are subject to risks and uncertainties
that may cause actual results to differ materially from those anticipated by
the forward-looking statements. These risks and uncertainties include, among
others: the risk that the closing of the financing may be delayed or may not
occur due to the failure to timely satisfy one or more conditions to closing;
the risk that additional capital may be required in the future to complete the
ENRICH trial; and the risk that EFAPROXYN may not prove to be safe or
efficacious. Additional information concerning these and other factors that
may cause actual results to differ materially from those anticipated in the
forward-looking statements is contained in the "Risk Factors" section of the
Company's Annual Report on Form 10-K for the year ended December 31, 2003, as
amended, and in the Company's other periodic reports and filings with the
Securities and Exchange Commission, including its Quarterly Report on Form 10-Q
for the quarter ended September 30, 2004. The Company cautions investors not to
place undue reliance on the forward-looking statements contained in this press
release. All forward-looking statements are based on information currently
available to the Company on the date hereof, and the Company undertakes no
obligation to revise or update these forward-looking statements to reflect
events or circumstances after the date of this presentation, except as required
by law.
Note: EFAPROXYN(TM) and the Allos logo are trademarks of Allos Therapeutics,
Inc.
DATASOURCE: Allos Therapeutics, Inc.
CONTACT: Jennifer Neiman, Manager, Corporate Communications of
Allos Therapeutics, +1-720-540-5227,
Web site: http://www.allos.com/
http://www.warburgpincus.com/