Progen, Avexa agree to merger

MELBOURNE, Australia Two Australian biotech companies have announced that they will merge, in a deal worth $13.6 million.

Progen Pharmaceuticals announced Monday that it would purchase Avexa in a deal that will come to a vote among shareholders of both companies in the first three months of 2009. The merger, unanimously recommended by the boards of both companies, will create one of Australia’s largest biotechnology companies; at the closing of the transaction, the combined company will have more than $40.8 million in cash.

The companies said the merger would create a “balanced portfolio” of infectious disease and cancer drug assets, including apricitabine, a drug in phase 3 testing as a treatment for HIV.

“This transaction provides a unique opportunity for Progen shareholders to invest in an integrated portfolio with near-term milestones that include Avexa’s exciting phase 3 program,” Progen CEO Justus Homburg said.