Javelin Pharma rockets as it gets a better offer from Hospira, so ditching deal with Myriad

Shares of Javelin Pharmaceutical leapt 63% to $2.18 in morning trading on the American Stock Exchange yesterday, after the firm said it had received a binding offer from fellow USA-based Hospira to acquire the company that was better than the merger deal it had already entered into with Myriad Pharmaceuticals, thus ditching the latter's proposal. Myriad last year offered to buy the company in a $96 million stock deal (The Pharma Letter December 21, 2009).

Hospira and its wholly-owned subsidiary Discus Acquisition Corp will, subject to certain conditions, commence an all cash tender offer to acquire all of the outstanding shares of Javelin at a per share price of $2.20 per share, worth around $141 million.

In addition, under the terms of the deal, Hospira will, subject to certain conditions, provide working capital facility under which Javelin may borrow up to $4.5 million to fund its operating activities prior to closing a merger with Hospira, $8.3 million for its repayment of the principal and accrued interest incurred under a similar financing arrangement entered into in connection with signing a definitive agreement and plan of merger with Myriad and $4.4 million for Javelin's payment of the termination fee and certain stipulated expenses that the company may be required to pay following termination of its merger agreement with MPI.