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Agensys Agrees To $387M Acquisition By Astellas

November 28, 2007 - VentureWire Life Science

By Lorie Konish

Cancer antibody therapies developer Agensys Inc., which has raised about $119 million in venture capital, has entered into a definitive agreement to be acquired by the U.S. subsidiary of Astellas Pharma Inc. for $387 million.

The price tag is based on the availability of about $30 million net cash balance when the deal closes. With the deal, Agensys shareholders will retain the right to receive up to an additional $150 million based on milestones related to the company's development after the acquisition. The deal is expected to close by the end of December, provided it gets shareholder and regulatory approval.

The decision to enter the agreement with Astellas came out of partnership discussions with multiple companies, according to Alta Partners Managing Director and Agensys board member Farah Champsi. Agensys has already formed partnership agreements with Merck & Co. Inc., Genentech Inc., Sanofi-Aventis Group and Seattle Genetics Inc.

"Astellas really valued Agensys as a discovery engine for antibodies," Champsi said. "We thought that it was the kind of partner with the kind of money that we needed to maximize the platform that has been built to date."

To date, Agensys has raised about $119 million in venture funding, according to Agensys Senior Vice President and Chief Scientific Officer Aya Jakobovits. Agensys last raised a $41.3 million Series D round in July, adding new co-lead investors Duquesne Capital Management, most known for hedge fund investing, and Japanese private equity firm JAFCO Co Ltd.

Other investors involved in the round included Innovis Investments, Nextech Venture Ltd., Bear Stearns Health Innoventures, Alta Partners, HBM BioVentures, Lombard Odier Darier Hentsch & Cie, H&Q Life Sciences Investments and OrbiMed Advisors.

Champsi declined to comment on the return investors would see on the acquisition because the deal hadn't closed yet. Other investors did not return calls seeking comment.

In July, at the time of the Series D transaction, Champsi told VentureWire she was optimistic about the company's prospects, estimating the company could reach an exit in 12 to 24 months. That positive outlook for the company was bolstered by other transactions in the antibody space, according to Champsi, including the sale of Morphotek Inc. to Eisai Co. for $325 million and Abgenix Inc. to Amgen Inc. for $2.2 billion.

Agensys is the developer of antibody therapies for the treatment of solid tumor cancers. Its lead candidate, which is partnered with Merck & Co. Inc., targets prostate and other cancers. The company also has treatments in development for kidney, colon, lung and ovarian cancers.

With the transaction, Agensys will operate as a wholly owned subsidiary of Astellas US Holding Inc. Agensys, currently with about 100 employees, expects to retain its employees and management team, Jakobovits said.

Montgomery & Co. LLC served as financial advisor to Astellas for the deal, while J.P. Morgan Securities Inc. acted as financial advisor to Agensys. Morrison & Foerster LLP served as legal counsel to Astellas, and Latham & Watkins LLP served as legal counsel to Agensys.