Canadian generics firm AnorMed has rejected a $380 million cash offer from Genzyme Corp to purchase the company, saying it doesn't reflect its full value but, in retaliation, the US firm says it will take the bid directly to shareholders. AnorMed has left the door open, saying it is willing to negotiate with Genzyme and put a counter proposal on the table. But the US firm has sidestepped discussions and now says it will make its $8.55 per share offer directly to the firm's stockholders.

Joe Dougherty, Chairman of AnorMed's recently devised strategic initiatives committee, said: “Members of the Board are unanimous in believing that the Genzyme approach fails to recognise the Company's ability to create value for shareholders by achieving clinical and commercialisation milestones for its lead product Mozobil in stem cell transplants and as a chemosensitizer, and its second clinical stage product, AMD070 for the treatment of HIV.”

To back up its point, the company says it hopes to unveil top-line data from two late-stage studies of Mozobil in cancer patients receiving stem cell transplantation by the second quarter of 2007, with a US filing forecast by the end of next year and in 2008 in Canada and Europe. And it is also looking at the drug's potential as a chemosensitiser for treating leukaemia patients, with clinical studies in this indication due to kick off in the next few months. Another lead product in its pipeline is AMD070, an anti-HIV agent in Phase I/II studies, more data on which will be unveiled at the forthcoming Conference on Retroviruses and Opportunistic Infections in February 2007.

And it is precisely the potential of Mozobil that Genzyme is hoping to get its hands on, saying it could improve the viability of stem cell transplantation and broaden the pool of patients who may be able to receive this transplant option. Mozobil, which has been granted orphan drug status in the USA and Europe, giving it a number of years of market exclusivity on approval, is also in Phase III trials for multiple myeloma with a second pivotal trial in non-Hodgkin's lymphoma due to conclude by the end of the year.

But, argues Genzyme, AnorMed is not in the right position to take the drug forward, citing a number of concerns over its senior executives, clinical and regulatory staff, the clinical development programme, the cost and execution risks, and the challenge of sourcing sufficient financing. “These challenges may ultimately prevent the shareholders of AnorMed from realising the significant value potential that has been created by the company's early development work. As more time passes, the potential value of the Mozobil opportunity, and therefore of AnorMed as a whole may erode further,” it warns, “since there is significant risk that the commercialisation of Mozobil will be delayed.”

In the meantime, AnorMed intends to adopt a rights plan for shareholders that would allow it more time to assess any offer made - but this will need to be approved by the Toronto Stock Exchange. Genzyme says it originally approached AnorMed in October last year and made its first offer of $8.55 in April this year but was “compelled” to submit it again earlier this month. The price of $8.55 represents 70% over AnorMed's closing price of $5.02 on the Nasdaq stock exchange on August 29, although of course this has since shot up to close at $9.09 last night with investors hoping it will prove to be a nice earner.