Poniard Pharmaceuticals Surges On Merger News With Allozyne

Shares of Poniard Pharmaceuticals PARD have jumped nearly 36% in after hours trading on Wednesday on news that the company is merging with privately held Allozyne, Inc. The press release announcing the transaction can be found below. SAN FRANCISCO, CA and SEATTLE, WA, Jun 22, 2011 (MARKETWIRE via COMTEX) -- Poniard Pharmaceuticals, Inc. /quotes/zigman/103159/quotes/nls/pard PARD +35.25% , a biopharmaceutical company focused on innovative oncology therapies, today announced the signing of a definitive merger agreement with ALLOZYNE, Inc., a privately held biotechnology company focused on the development of bioconjugated protein therapeutics. The merger transaction will bring together ALLOZYNE's autoimmune disease product pipeline and proprietary protein engineering platform and Poniard's oncology assets, including picoplatin, a Phase III-ready chemotherapeutic agent. The combined company is expected to focus its resources on advancing the ALLOZYNE products and platforms, and will seek a partnership for the continued development of picoplatin. Under the terms of the merger agreement, Poniard will issue shares of its common stock to ALLOZYNE stockholders based on an exchange ratio to be determined prior to closing of the transaction. Under the exchange ratio formula in the merger agreement, the former ALLOZYNE stockholders are expected to own approximately 65 percent of the combined company, and the former Poniard shareholders are expected to own approximately 35 percent of the combined company, each on a fully diluted basis. The exchange ratio has been calculated using the 5-day average closing sales price of Poniard common stock prior to the merger announcement, or $0.2270 per share. The exchange ratio is subject to adjustment as described in the merger agreement. If the merger is consummated, the combined company will be renamed ALLOZYNE, Inc. and will be based in Seattle. The merger transaction has been approved by the boards of directors of both companies and is currently anticipated to close during the second half of 2011, subject to filing of a registration statement and proxy statement with the Securities and Exchange Commission (SEC), approval by ALLOZYNE's and Poniard's respective stockholders, receipt of approval for listing of the combined company's common stock on The NASDAQ Capital Market, and other customary conditions of closing. Following closing of the merger, Meenu Chhabra, President and CEO of ALLOZYNE, will become President, CEO and a director of the combined company. In addition to Ms. Chhabra, the board of directors of the combined company is expected to consist of two current Poniard directors (Ronald A. Martell and another individual to be selected by the Poniard board), three current ALLOZYNE directors (Steven Gillis, Ph.D., Michael Steinmetz, Ph.D. and Carl Weissman) and one new independent director selected by a majority of the combined company's board. "We view this merger as a critical step in our goal of maximizing long-term value for our shareholders," said Ronald A. Martell, Chief Executive Officer of Poniard. "A merger with ALLOZYNE represents a new strategic direction for Poniard's shareholders, the risks of which, we believe, are mitigated and upside driven by a promising clinical asset, a pipeline of novel protein therapeutics, a proprietary biologic therapeutic platform offering significant partnership opportunities, and the potential of picoplatin." Ms. Chhabra stated: "We believe that ALLOZYNE's proprietary platform may enable us to enhance virtually any biologic therapeutic, including therapeutic proteins and antibodies. Our lead product, AZ01, a clinical-stage, PEGylated interferon ß for multiple sclerosis, could replace existing weekly or twice-weekly interferon treatment with monthly dosing and has the potential to address a significant unmet need in this multi-billion dollar market. By merging with Poniard, we believe we can access the public capital markets to accelerate our strategic plan. This plan includes the advancement of AZ01 into Phase II study, the advancement of AZ17, a bispecific antibody with broad potential in autoimmune and inflammatory diseases, into the clinic, and the further validation of our discovery platforms among potential partners."