News Article

Trubion Pharmaceuticals Gets Acquired by Emergent BioSolutions for $97M Upfront
Date: Aug 12, 2010
Author: Luke Timmerman
Source: xConomy ( click here to go to the source)

Featured firm in this article: Trubion Pharmaceuticals Inc of Seattle, WA

Trubion Pharmaceuticals, a one-time highflier in Seattle's biotech community, said today it is getting acquired for less than $100 million upfront. The buyer is Rockville, MD-based Emergent BioSolutions (NYSE: EBS).

Shareholders in Trubion (NASDAQ: TRBN) will get a total of $96.8 million in an upfront payment from Emergent, plus as much as $38.7 million in success-based milestone payements, bringing the total potential value of the deal to $135.5 million. For that sum, Emergent will get all of the technology that Trubion has developed since its founding in 2002, to make targeted drugs for autoimmune diseases and cancer which are smaller than conventional antibodies, in the hopes that they would be more effective and potent at hitting intended targets. Trubion had an accumulated deficit of $127 million through the end of March, and had $44.3 million left in cash and investments at that point, according to its most recent quarterly report.

The deal represents a value of $4.55 a share for Trubion, a 52 percent premium over the company's stock price of $3 at today's close. The deal is expected to close in the fourth quarter.

The sale of Trubion shouldn't come as a major surprise. The company's founding CEO, Peter Thompson, departed in November, and the company was led on an interim basis ever since by one of Trubion's venture backers—Steve Gillis of Arch Venture Partners. Trubion, as I described two years ago in these pages, underwhelmed investors in September 2007 when its lead drug candidate at the time, TRU-015, was unable to produce better results for rheumatoid arthritis patients than an already approved drug that hits the same target on cells, Genentech and Biogen Idec's rituximab (Rituxan). Trubion went through a round of layoffs in February 2009, and shifted priorities to TRU-016, a drug that showed some promise for chronic lymphocytic leukemia, and yielded a partnership with Facet Biotech.

"The acquisition of Trubion by Emergent will accelerate the continued development of our leading products and technologies," Gillis said in a company statement. "We believe the combination of Emergent's strong financial position and expertise in development of biologics with Trubion's innovative SMIP and SCORPION protein therapeutic product candidates and technologies will provide an efficient and effective development path for these promising products and technologies."

Trubion didn't say in its statement whether any jobs will be lost as part of the Emergent takeover. The company had about 75 employees after its most recent cutbacks in February 2009. [Updated: 2:25 pm, with expanded investor list.] Trubion's roster of backers includes Arch Venture Partners, Frazier Healthcare Ventures, Venrock, Oxford Bioscience Partners, Prospect Venture Partners, and Fidelity Management, according to the company's most recent proxy statement.

Gillis, in prepared remarks during a conference call today, said that Emergent is planning to maintain an R&D center in Seattle that will focus on drug development for the combined company. He didn't say how many people would work at the Seattle site.