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Rhone-Poulenc Rorer Inc. and Applied Immune Sciences, Inc. Announce Merger Agreement

Strategic Insights

— 2 min read

Rhone-Poulenc Rorer Inc. (RPR) and Applied Immune Sciences, Inc. (AIS) have entered into a definitive agreement and plan of merger, providing for the acquisition by RPR of AIS at a price of $11.75 per share in cash. The merger agreement contemplates that, following the closing of the tender offer, a wholly owned subsidiary of RPR will merge with AIS, and AIS' remaining stockholders will receive $11.75 per share in cash. The transaction is expected to be completed by the end of 1995.

Key Takeaways:

  • The merger agreement provides for the acquisition of AIS by RPR for approximately $84.4 million, with RPR owning approximately 46% of AIS' outstanding common stock prior to the merger.
  • The agreement contemplates the redemption of the preferred stock purchase rights under AIS' stockholder rights plan at $0.01 per right immediately prior to consummation of the tender offer.
  • Consummation of the tender offer is subject to the condition that a majority of the AIS shares not held by RPR have been validly tendered and not withdrawn, as well as certain other conditions.
  • Completion of the merger is subject to the closing of the tender offer, stockholder approval, if required, and no legal prohibition being applicable.
  • Thomas B. Okarma, M.D., Ph.D., Chairman, Chief Executive Officer and Chief Scientific Officer of AIS, stated that the transaction will significantly enhance AIS' ability to continue the development and commercialization of its products while offering shareholders an attractive premium for their shares.
  • AIS is a leader in cell therapy, with a patented device, the AIS CELLector(R), that isolates specific populations of a patient's cells from blood or bone marrow or tissue samples.
  • AIS currently has six products in clinical trials, including two in Phase 3, and has received FDA approval to begin a Phase 1 trial in ex vivo gene therapy using Avectin(TM), a non-viral gene transfer system, for interleukin-2 (IL-2) gene transfer in breast cancer patients.
  • RPR Gencell, a division of RPR dedicated to the discovery, development, manufacturing and commercialization of cell and gene therapy products, will be led by Thierry Soursac, M.D., Ph.D., with a primary focus on the development of ex vivo gene and cell therapy approaches.

Statistics:

  • The merger agreement is valued at approximately $84.4 million, based on the total number of AIS shares not held by RPR (7.2 million shares).
  • RPR owns approximately 46% of AIS' outstanding common stock prior to the merger.
  • AIS has six products in clinical trials, including two in Phase 3.
  • AIS has received FDA approval to begin a Phase 1 trial in ex vivo gene therapy using Avectin(TM).
  • RPR reported sales of $4.5 billion and invested $600 million in research and development in 1994.

Sources:

  • Rhone-Poulenc Rorer Inc. press release (PRN)
  • Applied Immune Sciences, Inc. press release (PRN)
  • Bob Pearson of RPR Gencell (610-454-3872)
  • Jackie Cossmon of Applied Immune Sciences (408-980-5804)
  • Anthony J. Russo, Ph.D. (ext. 202)
  • Kathryn Metcalfe (ext. 206)
  • Noonan/Russo Communications (212-696-4455)

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