Aratana Therapeutics To Buy Vet Therapeutics;reports $19.75 Mln Equity Financing

(RTTNews) - Aratana Therapeutics Inc. (PETX), a biopharmaceutical company focused on the licensing, development and commercialization of innovative medications for pets, announced Monday that it agreed to acquire Vet Therapeutics Inc., a San Diego-based company with a proprietary antibody-based biologics platform. As per the agreement, Aratana plans to continue to advance the pipeline of high value biologic drugs, including its lymphoma franchise.

As the terms of the merger agreement, Aratana agreed to pay to Vet Therapeutics' equity holders at the closing $30 million in cash, issue 625,000 shares of common stock and issue a promissory note for $3 million with a maturity date of December 31, 2014, subject to prepayment in the event of specified equity financings.

Aratana also agreed to pay up to $5 million in contingent cash consideration upon the achievement of certain regulatory and manufacturing milestones for the B-cell lymphoma product.

The Board of Directors and stockholders of Vet Therapeutics have approved the merger.

Upon the closing of the acquisition, Aratana said it expects that Genevieve Hansen, founder, President and Chief Scientific Officer of Vet Therapeutics, will become Aratana's Head of Biologics, and continue to manage Vet Therapeutics, Inc. as a wholly owned subsidiary of Aratana.

The closing is subject to other customary closing conditions and is expected to occur on Tuesday, October 15. After the closing of the acquisition, Vet Therapeutics will become a wholly owned subsidiary of Aratana, and is expected to continue to operate out of its San Diego location.

In addition, Aratana announced that it has reached a share purchase agreement providing for a $19.75 million private placement of shares of its common stock. The company agreed to issue 1.23 million shares for a purchase price of $16.00 per share. The financing is expected to close on or prior to October 17, 2013. As per the share purchase agreement, Aratana agreed to register all of such shares for resale.

The investors agreed not to sell any of such shares before the date that is 90 days after the closing date of the Vet Therapeutics acquisition. Aratana also announced a $5 million expansion of its existing venture debt facility with Square 1 Bank to partially fund the acquisition.

Additionally, Aratana said that Stifel, Nicolaus & Company, Incorporated and Lazard Capital Markets LLC, the lead book-running managing underwriters in the Company's recent public offering of 6,612,500 shares of common stock, are releasing a lock-up restriction with respect to the shares of the Company's common stock held by the Company's officers and directors and each of the other stockholders of the Company who signed a lock-up agreement. The release will take effect at 4:00 p.m., New York City time, on December 9, 2013, and the shares may be sold on or after such time.

However, each of the Company's officers and directors and several other stockholders, representing a total of about 14 million shares, have agreed with the Company to a new lock-up restriction for a period of 90 days after the closing of the acquisition of Vet Therapeutics.

As a result, the lock-up restriction from the company's initial public offering on about 4 million shares will be released on December 9, 2013.