Cytogen and Advanced Magnetics Call Off Merger

Advanced Magnetics (Cambridge, MA, USA) and biopharmaceutical company Cytogen Corp. (Princeton, NJ, USA) have announced the mutual termination of Cytogen's agreement to acquire Advanced Magnetics for US$60 million in stock. Instead, the two companies will enter into marketing, license, and supply agreements. Cytogen will acquire certain product rights to Advanced Magnetics' imaging agents in exchange for two million shares of stock. Cytogen will have exclusive U.S. rights to Combidex, a magnetic resonance imaging contrast agent for the detection of lymph node metastases. Cytogen will also have exclusive U.S. rights to imaging agent Code 7228 for oncology applications and the right of first negotiation for applications outside surgery.

Advanced Magnetics will be responsible for all costs associated with the clinical development, supply, and manufacture of Combidex and Code 7228. In addition to supplying Cytogen with these products, Advanced Magnetics will receive royalties based on product sales.

Both Cytogen and Advanced Magnetics agreed that the advantages of a marketing and supply arrangement outweighed the near-term benefits of the merger, said H. Joseph Reiser, Ph.D., president and CEO of Cytogen. In our opinion, Advanced Magnetics' product candidates provide critical information regarding the detection of metastatic cancer which is anticipated to address an unmet medical need in cancer detection and staging.