December 21, 2009 (FinancialWire) — Myriad Pharmaceuticals (NASDAQ: MYRX) has entered into a definitive agreement to acquire Javelin Pharmaceuticals (NYSE AMEX: JAV).

The acquisition augments Myriad’s portfolio of product candidates with Dyloject (diclofenac sodium for injection), a New Drug Application -submitted candidate with the potential, based on its safety and efficacy profile, to become a valuable addition to hospital formularies as an injectable NSAID for the multimodal management of moderate-to-severe postoperative pain.

Under the Agreement and Plan of Merger, Myriad Pharmaceuticals will acquire all of the outstanding shares of Javelin common stock in exchange for Myriad Pharmaceuticals stock, resulting in the Javelin stockholders owning approximately 41% of the combined company immediately after the closing. The ownership interest of Javelin shareholders may increase up to a maximum of approximately 45% depending upon the timing of FDA approval of Javelin’s lead drug candidate Dyloject. The transaction is expected to close in the first quarter of 2010. Concurrent with the closing of the transaction, Myriad Pharmaceuticals’ board of directors may be expanded to eight members, including up to two members to be nominated by Javelin.

An NDA for Dyloject was submitted by Javelin on December 2, 2009. Dyloject is an injectable formulation of diclofenac. The development package includes data from two positive Phase 3 studies in postoperative abdominal and orthopedic pain together with safety data accrued from greater than 1,300 patients.

Diclofenac, a member of the class of drugs known as non-steroidal, anti-inflammatory drugs, or NSAIDs, is widely prescribed as an oral treatment for postoperative pain due to its combination of efficacy and tolerability. There remains an underserved medical need in the hospital setting for injectable NSAIDs that are safe, effective and fast-acting in patients unable to take oral medications. Effective use of injectable NSAIDs offers the potential to reduce opioid use and thereby accelerate patient recovery and shorten hospitalization. There is a growing demand for alternatives to opioids in the management of postoperative pain.

Dyloject is approved and marketed in the United Kingdom by Therabel Pharma N.V. Myriad Pharmaceuticals will assume all rights to future milestone payments and royalties due from Therabel Pharma N.V.

Under the terms of the definitive merger agreement, Javelin shareholders will receive 0.282 shares of Myriad stock for each share of Javelin stock outstanding, representing a 16.8% premium over the average closing price of Javelin stock over the last 10 trading days. At the time of closing, Myriad will issue shares of common stock to Javelin shareholders representing approximately 41% of the fully diluted ownership of the combined company. Additional shares of common stock, representing approximately 4.1% of the fully diluted ownership of the combined company, will be placed in escrow and may be delivered, in whole or in part, to the pre-merger shareholders of Javelin, depending on the timing of FDA approval of Dyloject prior to June 30, 2011 as follows:

The boards of directors of both companies have unanimously approved the proposed transaction, which is subject to customary closing conditions, including receipt of required shareholder approvals of both companies.

Concurrent with the signing of the definitive agreement, the companies have entered into a loan and security agreement whereby Myriad will provide up to $6 million of interim financing to fund Javelin’s operating activities prior to closing, which is expected to occur during the first quarter of 2010.

Deutsche Bank Securities Inc. acted as financial advisor to Myriad Pharmaceuticals, Inc. in connection with the transaction. UBS Investment Bank acted as financial advisor to Javelin Pharmaceuticals, Inc.

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