09/08/2005
EpiCept Corporation and Maxim Pharmaceuticals Agree to Merge
Cooley Godward LLP represented Maxim Pharmaceuticals, Inc. in its merger with EpiCept Corporation. The Cooley team, comprised of attorneys from San Diego, CA and Broomfield, CO, includes partners Lance Bridges, Dan Meehan and Francis Wheeler and associates Charles Bair, Sean Clayton, Amy Gunter, Jenna King and Tom Owen. This is the third reverse biotech merger transaction handled by Cooley Godward in the last six months. Earlier this year, the Firm represented Panacos in the merger with V. I. Technologies and Epimmune in the merger with IDM.
San Diego, CA (September 6, 2005) – EpiCept Corporation (EpiCept), a privately held corporation, and Maxim Pharmaceuticals, Inc. (Maxim) (Nasdaq: MAXM - News; SSE:MAXM) announced today that they have entered into a definitive merger agreement. The transaction is anticipated to close during the fourth quarter of this year and is subject to satisfaction of certain customary closing conditions, including the approval of the shareholders of Maxim.
The new company, to be called EpiCept Corporation, combines a late stage product portfolio of commercially promising pain therapies, a planned cancer product registration filing in Europe and an early stage discovery program for apoptosis inducers and inhibitors designed to address unmet medical needs in the areas of oncology and degenerative diseases.
Jack Talley, CEO of EpiCept, stated, "This transaction will combine two companies to create a specialty pharmaceutical company with a balanced portfolio of pain management and oncology product candidates. This broad pipeline will allow the company to be less reliant on the success of any one product candidate. Additionally, several of the product candidates are partnered with respected industry leaders, further limiting the development risk, while other product opportunities are still available for internal development and commercialization. EpiCept's lead product candidates topically deliver FDA-approved compounds to relieve pain. We believe that topically delivered products have the potential to eliminate risks inherent in systemic circulation, reduce side effects, minimize drug interactions and raise barriers to entry for generics; and we believe the use of already approved compounds has the potential to lower development costs and risks and potentially accelerate time-to-market. Further, the broader pipeline will include a novel anti-cancer candidate, Ceplene, intended to be filed in Europe for remission-maintenance therapy for patients with acute myeloid leukemia (AML). Ceplene has a well-known safety profile with over 2,000 patients having participated in clinical trials."
Larry Stambaugh, CEO of Maxim, stated, "We are enthusiastic about the merger with EpiCept because we believe the strength and resources of the combined entity offers our shareholders a broader, more balanced portfolio of product candidates with significant market potential. We publicly announced earlier this year our intention to complete a strategic transaction to increase shareholder value and build upon the potential of Maxim's technologies. We believe this transaction accomplishes that goal."
Merger Details
The terms of the merger agreement provide for EpiCept to issue shares of its common stock to Maxim Pharmaceuticals shareholders in exchange for all of the outstanding shares of Maxim, with EpiCept shareholders retaining approximately 72 percent ownership of the combined company and Maxim shareholders receiving approximately 28 percent, calculated on a fully diluted basis. Based on the recent trading price of Maxim's common stock, the transaction would represent an implied equity value of approximately $136 million for the combined company.
The combined company will retain EpiCept's CEO and corporate name (EpiCept Corporation) with headquarters in Englewood Cliffs, NJ. In addition, Dr. Ben Tseng, Maxim's Vice President, Research, will become EpiCept's Chief Scientific Officer. The combined company's board of directors will consist of five current EpiCept directors and two current Maxim directors. EpiCept is expected to continue to operate Maxim's research facility in San Diego, California.
EpiCept currently has operations in New Jersey and Munich, Germany. Upon the closing of the transaction, EpiCept's common stock is expected to trade on the Nasdaq National Market on which the company has reserved the symbol "EPCT", and on the Stockholm Stock Exchange. Maxim's current ticker symbol "MAXM" will become inactive on both Nasdaq and the Stockholm exchange after closing.
Wachovia Securities served as financial advisor and Weil, Gotshal & Manges LLP as legal advisor to EpiCept Corporation. Piper Jaffray & Co. served as financial advisor and Cooley Godward LLP as legal advisor to Maxim Pharmaceuticals.