Dive Brief:

• Lantheus Holdings has agreed to buy Progenics Pharmaceuticals in an all-stock deal, adding a portfolio of therapeutics and imaging agents to complement its diagnostic capabilities.

• The deal, which the companies disclosed Wednesday, values Progenics at a 21.5% premium to its average stock price over the past 30 days, but received immediate pushback from some shareholders.​ Velan Capital, a significant shareholder in Progenics, accused the company's management of selling up at a "massive discount" and of making a "shameful maneuver" to prevent investors from being heard.

• Lantheus' stock price fell more than 20% since market close Tuesday. Shares in Progenics rose more than 16% Wednesday, but were down more than 8% Thursday morning.

Dive Insight:

Lantheus said it wants to buy Progenics to add new sources of revenue and expand its pipeline. Currently, Lantheus relies on Definity, a cardiovascular ultrasound contrast agent, for growth. However, with supply issues affecting its TechneLite isotope business, outlined during its most recent earnings call, sales came in flat at $85.7 million in the second quarter.

Buying Progenics could lessen Lantheus' reliance on Definity. Progenics has three therapeutics on the market, two of which are licensed to Bausch Health, and has diagnostic imaging agents and an AI imaging analysis technology in late-phase development.

The management teams at Lantheus and Progenics have respectively talked up the "complementary strengths" of the transaction, describing it as the start of "an exciting new chapter" in a statement.

Investors are less enamored with the terms of the deal, however. Velan, an Alpharetta, Georgia-based activist investor pushing for changes at the company in recent months.

"Velan is appalled that the Board would so egregiously attempt to shirk its fiduciary duties by approving a transaction to sell the Company at such a massive discount," the investor wrote in a statement published hours after Progenics disclosed the deal.

Velan cited specific concerns including the requirement for Progenics to pay an $18.3 million break-up fee if its board recommends against the takeover. Velan, which has pushed to change the makeup of Progenics' board, sees the Lantheus deal as "effectively penalizing stockholders" if they consent to its reform proposals. 

Velan is now working on a plan that will present an alternative path forward for Progenics. The effort reflects Velan's belief that Progenics would be worth substantially more if it had a different leadership team.

Lantheus expects the deal to close in the first quarter of 2020.