Investment firm nets millions in YM Biosciences sale

The sale of Mississauga-based drug development company YM Biosciences has netted millions of dollars in profits for a Canadian investment firm.

In a near-unanimous vote, the deal will have Gilead Sciences Inc. acquire all the issued and outstanding common shares of the Orbitor Rd. cancer-drug development company for US $2.95 in cash per common share.

Vancouver-based venture capital firm Discovery Capital Management LLC is the largest shareholder of YM Biosciences with 8 per cent of total shares. The company stands to make $36.7 million after being paid US $2.95 in cash per common share in a purchase deal recently approved by major shareholders.

After being cleared by Canadian and U.S. competition regulators, this acquisition agreement puts the value of YM at approximately US $510 million. Completion of the deal is subject to the final approval of the Supreme Court of Nova Scotia, where a hearing is set to take place on February 5, 2013.

Other investment firms that stand to generate millions from the transaction are New York-based private equity firm HealthCor Partners LP with $26.3 million and Baltimore-based publicly owned investment firm T. Rowe Price Associates with $22.5 million.

YM’s lead drug is CYT387, a treatment for patients with specific kinds of rare blood disorders, inflammatory disorders and certain cancers, including leukemia.

The company recently reported positive results from a Phase I/II clinical trial of CYT387 in 166 patients with myelofibrosis, a life-threatening rare-blood disorder with limited treatment options. It said patients had marked improvement in their conditions, spleen functions, and the number of individuals dependent on daily transfusions was reduced.

The test results were presented at the 54th annual meeting of the American Society of Hematology.

YM Biosciences was first established in 1994 and went public on the stock market in 2002. The company currently has about 40 employees, most of them located at their Mississauga office.

 

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