Celgene Corp is splashing out $2.9 billion in cash and stock to acquire fellow US firm Pharmion Corp as part of its bid to become “a global leader in the haematology/oncology field”.
Under the terms of the agreement, Celgene will acquire Pharmion for $72.00 per share, payable in a combination of cash and stock. The deal represents quite a leap on Pharmion’s closing price on Friday night of $49.28.
Celgene chief executive Sol Barer said the purchase is “an exceptional strategic fit that will expand our role as a leader in haematology and oncology”. He added that “our combined global infrastructure will leverage the therapeutic and commercial potential of Pharmion’s products, particularly Vidaza (azacitidine) which has the potential to become a major global therapy.
Vidaza was approved in the USA in May 2004 for myelodysplastic syndromes, a disease of the bone marrow which may progress to leukaemia. Sales of Vidaza for the third quarter were up 15.6% to $42.3 million and Pharmion recently announced new Phase III data which demonstrated that patients receiving the drug had a two-year survival rate of 50.8% (or 24.4 months) versus 26.2% (or 15 months) for those on conventional care regimens.
Market authorisation for Vidaza in higher-risk MDS will be sought in Europe before the end of the year and analysts believe that Celgene will be able to market its best-selling drug Revlimid (lenalidomide), an analogue of thalidomide, for less sick patients with MDS, then switch patients to Vidaza after they develop resistance.
The two firms are already partners through thalidomide, which was licensed to Pharmion by Celgene for Europe and other select countries and is under review at the European Medicines Agency as a therapy in newly diagnosed multiple myeloma. Pharmion also has amrubicin, a third-generation synthetic anthracycline, which is in Phase III for the treatment of small-cell lung cancer, and MGCD0103, a selective histone deacetylase inhibitor is being evaluated in Phase II studies in haematological malignancies as well as in solid tumours.
Celgene noted that the deal will have a negative effect on its 2008 earnings but will have a positive impact thereafter. The boards of both companies have approved the transaction which is expected to be completed before the end of the second quarter next year.
