Millennium Pharmaceuticals has decided not to increase it bid to acquire Canadian drugmaker AnorMed, leaving the way clear for rival Genzyme to proceed with its $580 million offer for the business.
Last week, AnorMed’s chairman Kenneth Galbraith said that Genzyme’s proposal was superior, but that if Millennium matched or exceeded the bid it would win its support. Yesterday, Millennium declined to up the ante and said it would walk away from the deal, pocketing a $19.5 million break-up fee in the process.
Genzyme was the first to enter the bidding for AnorMed with a $380 million hostile takeover attempt in August, but was trumped by a higher, $515 million offer from Millennium the following month.
Both companies are trying to get their hands on AnorMed's lead drug Mozobil (AMD3100), used to drive stem cells out of bone marrow into circulating blood, where they can be collected for use in a life-saving stem cell transplant in cancer patients, which is in Phase III testing.
Some analysts believe Mozobil will bring in sales of only $100-$200 million per year and they fear Genzyme may be overpaying for AnorMed.