Genzyme Corp has announced plans to acquire fellow US firm and partner Bioenvision for around $345 million in cash in a bid to further expand its oncology business and gain exclusive rights to the leukaemia drug clorafabine.
Genzyme is prepared to pay $5.60 per share to get control of Bioenvision, which represents a 50% premium over the latter’s 20-day trading average. The deal is expected to be accretive to the Cambridge, Massachusetts-based firm’s earnings in 2009 but this year will result in a charge of $0.06 per share.
The principal rational behind the deal is to get hold of all the rights to clorafabine, which the firms jointly developed in Europe where it is currently sold by Bioenvision as treatment of acute lymphoblastic leukaemia in relapsed and refractory paediatric patients (Genzyme sells the drug in North America as Clolar). However, they are also developing clofarabine “for significantly larger indications”, such as a first-line therapy for the treatment of adult acute myeloid leukaemia.
Mark Enyedy, general manager of Genzyme Oncology, said that “strategically, financially and operationally, this acquisition makes great sense for our business", adding that “we have developed a comprehensive understanding of clofarabine and its clinical potential, and are fully engaged in expanding its use... full ownership will accelerate the development and commercialisation of this important therapy."
In addition to clofarabine, Bioenvision also markets Modrenal (trilostane), which is approved in the UK for the treatment of post- menopausal breast cancer following relapse from initial hormone therapy. It also claims to have a pipeline in development “to address unmet needs in autoimmune disease and infectious disease”.
Genzyme is best-known for drugs that treat rare conditions, such as the Gaucher disease treatment Cerezyme (imiglucerase), the Fabry disease drug Fabrazyme (agalsidase beta) and Myozyme (alglucosidase alfa) for Pompe disease, but it completed a $1 billion acquisition of Ilex Oncology at the end of 2004, which gave the US biotechnology company a strong foothold in the highly lucrative cancer marketplace.
$1.5 billion share buyback
Genzyme's board of directors also announced that they have authorised the repurchase of 20 million shares of its outstanding common stock, valued at $1.5 billion, over the next three years.
The company said that the move is designed to reduce the dilutive effect of its equity compensation programmes and “reflects Genzyme's confidence in the long-term value of its common stock”.
