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MGI Pharma to "extinguish" Guilford Pharmaceuticals convertibles upon acquisition
By Jennifer Chiou
New York, July 21 - MGI Pharma, Inc. said it intends to "extinguish" Guilford Pharmaceuticals Inc.'s convertible subordinated notes on closing of its acquisition of the company.
As of March 31, $69.4 million of the convertibles were outstanding. Guilford originally sold $60 million of the notes June 11, 2003, with an exercised $9.3 million greenshoe on July 30, and priced them to yield 5.0% with a 30% initial conversion premium.
MGI Pharma will also eliminate about a $60 million obligation related to Guilford's revenue interest agreement with Paul Royalty Fund.
"This strategic transaction significantly advances our efforts in building an acute care business and enhances our existing oncology franchise as we create a leading biopharmaceutical company," said Lonnie Moulder, president and chief executive officer of MGI Pharma. in a news release.
"In addition to a talented group of people, this transaction brings several important assets to MGI Pharma, including Aquavan injection, a late-stage, acute care product candidate for procedural sedation that, upon approval, will be an excellent companion product to Aloxi injection for PONV."
MGI Pharma expects the acquisition to accelerate future earnings growth.
Guilford Pharmaceuticals Inc. is a Baltimore biopharmaceutical company engaged in the research, development and commercialization of proprietary drugs that target hospital markets, including the Gliadel wafer for brain tumors .
Bloomington, Minn.-based MGI Pharma is an oncology and acute care focused biopharmaceutical company, which markets Aloxi injections and Kadian capsules.
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