SPPI a Step Closer to Allos - Analyst Blog
Spectrum Pharmaceuticals (SPPI) is a step
closer to acquiring Allos Therapeutics (ALTH) with
the companies announcing the termination of the waiting period
under the Hart-Scott-Rodino Antitrust Improvement Act of 1976.
The US Federal Trade Commission (FTC) cleared the acquisition of
Allos by Spectrum Pharma which is expected to close on September 4,
2012. Spectrum Pharma stated that it will accept for payment shares
of Allos validly tendered prior to the expiration of the buyout
offer on September 4 (5pm ET).
Spectrum Pharma had announced its intention to acquire
biopharmaceutical company, Allos in April 2012. Per the terms of
the deal, Spectrum Pharma will acquire Allos for $1.82 per share in
cash along with one contingent value right (CVR).
The CVR, which will not be traded in the public domain, makes
each Allos shareholder eligible to receive a further $0.11 per
share in cash depending on the conditional European approval and
achievement of certain milestones of Allos’ sole marketed drug,
Folotyn.
We remind investors that Folotyn is available in the US for the
treatment of patients with relapsed or refractory peripheral T-cell
lymphoma (PTCL).
Currently, Spectrum Pharma’s product portfolio comprises two
marketed products -Fusilev used for treating advanced metastatic
colorectal cancer and for rescue in osteosarcoma (a form of bone
cancer) patients following treatment with a high-dose of
chemotherapy drug, methotrexate and Zevalin for treating patients
suffering from non-Hodgkin’s lymphoma.
The addition of Folotyn will further strengthen the oncology
portfolio of Spectrum Pharma. At the time of announcing the deal,
management at Spectrum Pharma had stated that both Zevalin and
Folotyn will target the same set of doctors for treating different
cancer forms. This makes the deal all the more sound
strategically.
Our Recommendation
Currently, we have a Neutral recommendation on Allos in the long
run. The stock carries a Zacks #3 Rank (Hold rating) in the short
run. However, we have an Underperform recommendation on Spectrum
Pharma. The company carries a Zacks #5 Rank (Strong Sell) in the
short run.
ALLOS THERAPEUT (ALTH): Free Stock Analysis Report
SPECTRUM PHARMA (SPPI): Free Stock Analysis Report
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Allos Therapeutics, Inc. (MM) (NASDAQ:ALTH)
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