Proposed 38% Premium Ranks Much Lower Than
Average Premium of Approximately 89% for Comparable Biopharma
Transactions since 2020
Believes Acceleron Has Significant Momentum
Given Recent Positive Data for Sotatercept Drug Candidate
Avoro Capital, a long-term and collaborative investor in life
sciences and biotechnology companies, beneficially owns
approximately 7% of Acceleron Pharma Inc. (Nasdaq: XLRN)
(“Acceleron”, “XLRN” or the “Company”) together with certain of its
affiliates and managed funds (“Avoro,” “we” or "us"), making it one
of the Company's most significant shareholders. Avoro today issued
the following statement:
Despite the fact that Avoro believes that
Acceleron’s management team has done an excellent job at creating
value for shareholders and that the Company has great potential, we
do not view the proposed sale of Acceleron to Merck & Co. Inc.
(NYSE: MRK) ("Merck") for $180 per share (the "Merger") as being in
the best interests of all Acceleron shareholders.
Avoro believes that, first and foremost, the
Merger consideration drastically undervalues XLRN. At present,
treatment options for patients with pulmonary arterial hypertension
(PAH) remain limited to vasodilator therapies that do not address
the underlying pathophysiology of the disease. Sotatercept,
Acceleron’s novel ligand trap designed to rebalance BMPR2
signaling, is currently being investigated in phase 3 clinical
trials. Recent data suggests that sotatercept will be the first
disease-modifying agent available to patients suffering from PAH,
which has led to the granting of Breakthrough Therapy Designation
by the FDA and PRIME Designation by the EMA.
While we believe Merck is a tremendous
company and ultimately could be a good partner to maximize the
value of sotatercept and the rest of Acceleron’s pipeline for both
patients and shareholders, we do not believe a transaction makes
sense right now at the current valuation proposed by Merck.
In particular, this transaction premium of
approximately 38% would rank at the very bottom of the 19
comparable transactions in the biopharmaceuticals sector since the
beginning of 2020, during which premiums have averaged
approximately 89%.1
Based on our initial conversations with other
market participants, it seems that the justification for the
transaction and the price has been that this was the highest
premium available. That answer simply raises an even more pertinent
question: why sell now at such a price?
We believe there should be no urgency to sell
at a low price now since the value of the Company will only
increase as additional clinical trial data is released. Based on
our own analysis and that of other prominent scientific observers,
we have full confidence that Acceleron’s pipeline will continue to
perform well and only further demonstrate the value of the
Company.
While we do not typically comment publicly,
we feel incredibly strongly that this transaction if allowed to
proceed would do a disservice to XLRN shareholders.
We look forward to engaging constructively
with Acceleron management, as well as our fellow investors, in
order to hear other perspectives and to further articulate our
rationale in the hope that we can be part of identifying a better
path forward.
About Avoro Capital L.P.
Avoro Capital L.P., is the parent of Avoro Capital
Advisors LLC (“Avoro Capital Advisors”) and Avoro Ventures
LLC (“Avoro Ventures”). Avoro Capital Advisors is an
SEC-registered investment manager located in New York City,
investing in public and private equity companies focused primarily
on life sciences and biotechnology. Managing Partner, Behzad
Aghazadeh PhD, has over 25 years of experience spent in scientific
research, healthcare consulting, institutional investment and
executive leadership within the healthcare sector, and is supported
by a team of seasoned professionals with advanced medical and
scientific backgrounds, and extensive investment experience in the
biopharmaceutical industry.
Important Information
The tender offer described in this communication has not yet
commenced. This communication is for informational purposes only
and is neither an offer to purchase nor a solicitation of an offer
to sell any shares of the common stock of Acceleron or any other
securities, nor is it a substitute for the tender offer materials
described herein. At the time the planned tender offer is
commenced, Avoro anticipates that a tender offer statement on
Schedule (TO), including an offer to purchase, a letter of
transmittal and related documents, will be filed by Merck and
Astros Merger Sub, Inc., a wholly-owned subsidiary of Merck, with
the Securities and Exchange Commission (the “SEC”), and a
solicitation/recommendation statement on Schedule 14D-9 will be
filed by Acceleron with the SEC. Once filed, investors will be able
to obtain a free copy of these materials and other documents filed
by such parties with the SEC at the website maintained by the SEC
at www.sec.gov. Investors and security holders are advised to read
these documents, any amendments thereto as well as any other
documents relating to the tender offer and Merger, when they become
available, as they contain important information.
Forward-Looking Statements
This communication contains forward-looking statements.
Forward-looking statements are statements that are not historical
facts and may include projections and estimates and their
underlying assumptions, statements regarding plans, objectives,
intentions and expectations with respect to future financial
results, events, operations, services, product development and
potential, and statements regarding future performance.
Forward-looking statements are generally identified by the words
“expects”, “anticipates”, “believes”, “intends”, “estimates”,
“plans”, “will be” and similar expressions. These forward-looking
statements include, without limitation, statements regarding the
planned completion of the transactions contemplated by the Merger.
Although Avoro believes that the expectations reflected in such
forward-looking statements are reasonable, investors are cautioned
that forward-looking information and statements are subject to
various risks and uncertainties, many of which are difficult to
predict and generally beyond the control of Avoro, Merck or
Acceleron, that could cause actual results and developments to
differ materially from those expressed in, or implied or projected
by, the forward-looking information and statements. These risks and
uncertainties are enumerated in Acceleron's public filings and
recent public communications regarding the Merger by Acceleron and
Merck. In addition, the foregoing considerations and any other
publicly stated risks and uncertainties should be read in
conjunction with the risks and cautionary statements discussed or
identified in the public filings with the U.S. Securities and
Exchange Commission (the “SEC”) made by Merck & Co., Inc. and
Acceleron, including those listed under “Risk Factors” in Merck
& Co., Inc.’s annual reports on Form 10-K and quarterly reports
on Form 10-Q and Acceleron’s annual reports on Form 10-K and
quarterly reports on Form 10-Q and current reports on Form 8-K
filed with the SEC. The forward-looking statements speak only as of
the date hereof and, other than as required by applicable law,
Avoro does not undertake any obligation to update or revise any
forward-looking information or statements.
1 Criteria was US based-public, BioPharma M&A deals >$1B
(excluding SPACs) – Source: Bloomberg
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210930005954/en/
Sloane & Company Dan Zacchei / Joe Germani
dzacchei@sloanepr.com / jgermani@sloanepr.com
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