Tuesday, June 15, 2004

QLT TO ACQUIRE ATRIX IN $855 MILLION TRANSACTION

QLT Inc. entered an agreement to acquire 100 percent of the common stock of Atrix Laboratories Inc. in a transaction valued at approximately $855 million in stock and cash.

The companies said the combined entity will diversify its product portfolio, which includes QLT's Visudyne (verteporfin), which is co-promoted with Novartis AG for age-related macular degeneration, and Atrix's injectable prostate cancer therapy pharma brand Eligard (leuprolide acetate). QLT also focuses on the development of therapies in dermatology, oncology and urology.

"We believe this merger brings together two complementary companies, creating a growing revenue base of proprietary products, potential marketing opportunities, economies of scale, distribution synergies, complementary product portfolios and expanded manufacturing capabilities that ultimately should enhance shareholder value," said David Bethune, Atrix's chief executive.

Terms of the agreement provide that Atrix shareholders receive one common share of QLT plus $14.61 in cash for each share of Atrix common stock owned. Atrix shareholders will own approximately 23 percent of the new firm while QLT shareholders will hold the remaining 77 percent. The value of the transaction net of Atrix's cash is $751 million.

The combined organization expects to generate between 15 and 20 percent in revenue growth per year with a long-term earnings-per-share compound annual growth rate of 20 to 25 percent.

The transaction is expected to be accretive in 2006.

Atrix shares closed at $31.39, up $3.37, or 12 percent, in heavy trading on the Nasdaq. QLT shares closed at $17.55, down $3.47, or 16.5 percent, in heavy trading on the Nasdaq.