WAYNE, Pa.--(BUSINESS WIRE)-- Safeguard Scientifics, Inc. (NYSE: SFE - News), a holding company that builds value in growth-stage life sciences and technology companies, today announced that it expects to receive an additional $5.6 million in proceeds from Eli Lilly and Company’s (NYSE: LLY - News) acquisition of former partner company Avid Radiopharmaceuticals, Inc., which took place in December 2010.
Under terms of the agreement, Eli Lilly acquired all outstanding shares of Avid for an upfront payment of $300 million. This generated initial net proceeds of $32.3 million for Safeguard. In addition, Safeguard recently received $3.4 million, which had been held in escrow.
On April 6, 2012, Eli Lilly and Avid Radiopharmaceuticals announced that the U.S. Food and Drug Administration (FDA) approved Amyvid, a radioactive diagnostic agent indicated for brain imaging of beta-amyloid plaques in patients with cognitive impairment who are being evaluated for Alzheimer's Disease and other causes of cognitive decline. The achievement of this milestone triggered the payment of $5.6 million in additional proceeds to Safeguard, increasing expected total net proceeds to $41.3 million and a 3.4x cash-on-cash return. Depending on the achievement of difficult future regulatory and commercial milestones, Safeguard could see its cash-on-cash return increase to up to 8x.
“Disciplined execution of our strategic game continues to lead to value creation for Safeguard,” said Peter J. Boni, President and Chief Executive Officer. “In addition, Avid’s progression through various clinical milestones demonstrates the importance of partnering with life sciences companies that have strong management, innovative products and/or services and capital efficient paths towards commercialization. This milestone payment strengthens our balance sheet and provides us with continued financial flexibility to redeploy capital into new, high-growth, high-value opportunities as well as our current partner companies. We are excited about our positive momentum and will continue to work to drive value for our shareholders.”
About Safeguard Scientifics
Founded in 1953 and based in Wayne, PA, Safeguard Scientifics, Inc. (NYSE: SFE - News) provides growth capital for entrepreneurial and innovative life sciences and technology companies. Safeguard targets life sciences companies in Molecular and Point-of-Care Diagnostics, Medical Devices, Regenerative Medicine, Specialty Pharmaceuticals and selected healthcare services, and technology companies in Internet / New Media, Financial Services IT, Healthcare IT and selected business services with capital requirements of up to $25 million. Safeguard participates in expansion financings, corporate spin-outs, management buyouts, recapitalizations, industry consolidations and early-stage financings. For more information, please visit our website at www.safeguard.com, our blog at blog.safeguard.com, download our web app at app.safeguard.com, or you can follow us on Twitter (twitter.safeguard.com), StockTwits (stocktwits.safeguard.com), SlideShare (slideshare.safeguard.com), LinkedIn (linkedin.safeguard.com), and YouTube (youtube.safeguard.com).
Except for the historical information and discussions contained herein, statements contained in this release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward-looking statements are subject to risks and uncertainties. The risks and uncertainties that could cause actual results to differ materially include, among others, managing rapidly changing technologies, limited access to capital, competition, the ability to attract and retain qualified employees, the ability to execute our strategy, the uncertainty of the future performance of our companies, acquisitions and dispositions of companies, the inability to manage growth, compliance with government regulations and legal liabilities, additional financing requirements, the effect of economic conditions in the business sectors in which our companies operate, and other uncertainties described in the Company's filings with the Securities and Exchange Commission. Many of these factors are beyond our ability to predict or control. As a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. The Company does not assume any obligation to update any forward-looking statements or other information contained in this news release.
Safeguard Scientifics, Inc.
John E. Shave, 610-975-4952
Vice President, Business Development and Corporate Communications