Local drug company announces US merger

Melbourne-based drug company Biota Holdings (ASX: BTA) is to merge with United States-based Nabi Pharmaceuticals to form a new company to be listed on the NASDAQ index.

The new company will be called Biota Pharmaceuticals and have its headquarters in the US.

“The Biota move to the US is designed to achieve better value recognition and liquidity through a stronger US shareholder base,” Biota said in a statement.

The deal will require approval by both companies’ shareholders.

Current Biota shareholders will own about 74% of Biota Pharmaceuticals, and Nabi shareholders will own about 26%.

“A NASDAQ listing provides Biota with access to the largest healthcare capital market in the world and will enable us to transform our business model to one which can deliver significantly higher value than the royalty-only model we have historically pursued,” Biota chairman Jim Fox said.

“We believe this is a necessary step to increase our options for the development and commercialisation of our product portfolio and will ultimately improve the recognition of the underlying value of our product portfolio for our shareholders,” Fox said.

Nabi Pharmaceuticals (NABI: US) is a biopharmaceutical company developing vaccines to treat nicotine addiction, preventing smoking relapse and infectious diseases based in the northern suburbs of Washington DC.

Biota deals with respiratory diseases such as influenza.

Biota’s share price had fell 7.94% to 87 cents at 1.35pm AEST.