The proposed $81 million acquisition of AIDS drug company Trimeris is dead in the water.
The Durham, N.C.,-based drug company's South Korean suitor, Arigene, announced today that it has pulled the plug on its tender offer. The reason: It was unable to arrange sufficient funding to close the deal.
It was a deal that Trimeris' shareholders definitely wanted. A total of 86.4 percent of the company's more than 19 million outstanding shares had agreed to the tender offer price of $3.60 a share.
Arigene said the tendered shares would be returned to the shareholders.
The lack of adequate funding surprises no one. Arigene had twice asked Trimeris to extend the deadline for its tender offer while it continued to seek financing. Trimeris agreed to the first request but never responded to the second; consequently, the tender offer expired at 5 p.m. Monday.
Trimeris said that it will continue its operations while it seeks out "additional opportunities to enhance shareholder value consistent with its previously elaborated strategy."
Sales of Trimeris' AIDS drug Fuzeon never met the lofty expectations of shareholders and management. Fuzeon sales, which were hindered by the drug's side effects and its $20,000-a-year price, peaked at $266.8 million in 2007.
Trimeris doesn't walk away from the deal empty-handed, however. As part of last month's agreement to extend the tender offer's original deadline, Trimeris received a $12 million payment from Arigene -- the amount the South Korean company previously agreed to pay Trimeris if the deal fell through.
"Trimeris will retain the benefit of the receipt of such fee, net of transaction, advisors' and legal fees" arising from the tender offer, the company said. Trimeris also stated that it "is evaluating its other rights and remedies" under its agreement with Arigene now that the deal has been terminated.
Shares of Trimeris fell 40 cents to $2.78 in early trading this morning.