Troubled Vancouver biotech firm QLT Inc. (TSX:QLT) is merging with U.S.-based Auxilium Pharmaceuticals (Nasdaq: AUXL) in a agreement worth about US$300 million in stocks.
Auxilium CEO Adrian Adams said in a June 26 conference call the deal was a strategic move designed to accelerate his company’s transformation into a diversified specialty bio-pharmaceutical company.
He told investors to expect the transaction be completed by the end of 2014’s fourth quarter.
QLT, which specializes in drugs for eye diseases, will remain incorporated in B.C. and operate as a subsidiary called as New Auxilium, while the merged company will stay headquartered in Chesterbrook, Mass.
Current Auxilium shareholders will receive 3.1359 QLT shares for each Auxilium share.
Auxilium said the deal would allow it to move from a tax rate in the mid-to-high 30% range to the mid-20% range.
Once the deal is completed, QLT shareholders will own 24% of the newly merged company.
In July 2012, QLT called off a hiring spree and cut its staff from 214 to 68 after a Danish venture capital firm seized control of its boardroom.
The new chairman, Jason Aryeh, said the company had to put an end to the hiring due to shareholder concerns. Among the causalities was QLT CEO Bob Butchofsky.
In September 2012, QLT agreed to sell the rights to its primary drug, Visudyne, to Valeant Pharmaceuticals (TSX:VRX) for $112 million.
QLT was founded in 1986 and employed 400 staff at its peak in 2006.
By December 2012, just 38 employees remained.
