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BioSante, ANI Pharmaceuticals ink merger

Friday, October 5, 2012

Lincolnshire, Ill.-based BioSante Pharmaceuticals and ANI Pharmaceuticals, a fully integrated specialty branded and generic pharmaceutical company of Baudette, Minn., have entered into a definitive merger agreement through an all-stock transaction, with BioSante as the surviving company.

The merger transaction will bring together BioSante’s cash, anticipated future licensing revenues and other assets, including products in development, with ANI’s niche branded and generic pharmaceutical products and contract manufacturing operations, which together generated net sales of over $16 million in 2011. ANI currently generates positive cash flow from operations and has no long-term debt.

Upon completion of the merger, BioSante will issue to ANI stockholders shares of BioSante common stock such that the former ANI stockholders will own approximately 53% of the combined company’s shares outstanding, and the former BioSante stockholders will own approximately 47%, subject to adjustment as provided in the merger agreement. In addition, immediately prior to the merger, BioSante plans to distribute to its then current stockholders contingent value rights (CVR) providing payment rights arising from a future sale, transfer, license or similar transactions involving BioSante’s LibiGel.

The combined company will be renamed ANI Pharmaceuticals and will operate under the leadership of the ANI management team, with Arthur S. Przybyl serving as president and CEO. In addition to Przybyl, the board of directors of the combined company is expected to have two current directors from BioSante and four current ANI directors.

“We believe that the strategic combination of our two companies will allow ANI to accelerate our growth strategy and create value for our stockholders with a well-capitalized balance sheet,” stated Arthur S. Przybyl, president and CEO of ANI. “Additionally, we believe that potential future license and other royalty fees due to BioSante for its FDA-approved male testosterone gel, licensed to Teva, and other products could generate significant future cash flow for ANI going forward.”

“After reviewing various strategic alternatives, engaging in discussions with a number of other potential merger candidates and conducting extensive due diligence on ANI, our board of directors has recommended unanimously a merger with ANI,” said Stephen M. Simes, president and CEO of BioSante. “We found the ANI opportunity to be particularly compelling for our stockholders since it will combine two potentially valuable portfolios of products in development and add a sales and marketing presence, while preserving for our current stockholders the right to realize potential future value from LibiGel in the form of CVRs of up to $40 million.”

The merger transaction has been approved by the boards of directors of both companies and currently is anticipated to close in the first quarter of 2013, subject to customary closing conditions.

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