UPDATE 1-Cancer drug company BioAlliance to buy Topotarget

Wed Apr 16, 2014 2:50am EDT

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(Adds detail, market value, CEO comment)

PARIS, April 16 (Reuters) - France's BioAlliance Pharma said it agreed to buy Scandinavian biopharmaceutical company Topotarget to boost its scale and combine their pipelines of new rare cancer treatments.

Topotarget shareholders will receive two new BioAlliance Pharma shares for every 27 Topotarget shares owned, implying approximately one-third ownership for Topotarget shareholders and two-thirds for BioAlliance Pharma.

"The merger with Topotarget will strengthen and diversify our position in rare oncology diseases," BioAlliance Pharma Chief Executive Judith Greciet said in a statement.

The companies see the total market for rare cancer drugs rising from more than $45 billion in 2013 to $80 billion in 2018, with new rare diseases continuously being discovered.

Topotarget's main product, belinostat, aimed at peripheral T-cell lymphoma patients, is expected to be approved in the United States in August, triggering a $25 million payment from U.S. partner Spectrum Pharmaceuticals as well as double-digit royalties on future sales.

BioAlliance has two products in late stages of development: livatag for liver cancer, with potential estimated sales of 800 million euros and patent protection until 2032, and validive for the prevention and treatment of mouth sores resulting from radiotherapy and chemotherapy.

Topotarget, whose stock is down 7.4 percent this month, has a market value of about $80 million, compared with $205 million for BioAlliance, whose shares have soared 67 percent since the start of the year.

The transaction, which has been unanimously approved by the boards of directors of both companies and is backed by their leading shareholders, is expected to be completed in July or August, BioAlliance Pharma said.

The French company, listed on Euronext Paris, said it will apply for a dual listing of its shares at NASDAQ OMX Copenhagen following the takeover.

CenterviewPartners and Nordea acted as financial advisors to BioAlliance Pharma. Topotarget was advised by ABG Sundal Collier. ($1 = 0.7234 Euros) (Reporting by James Regan; Editing by Clarence Fernandez and Andrew Callus)

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