Celgene Corporation, the pharmaceutical company, announced yesterday that it has agreed to acquire drug development company Pharmion Corporation for $2.9 billion.
Celgene manufactures thalidomide-based drugs for blood cancers, but the main focus for the deal is Pharmion’s Vidaza, a leukemia treatment that helped patients live longer in a study.
The drug, for myelodysplastic syndrome, a condition that can precede the blood cancer leukemia, generated $33 million in U.S. sales in the third quarter after an August study showed the drug can extend patients' lives.
Fortification
The deal, in cash and stock, is subject to customary closing conditions. Celgene said it will acquire all of the outstanding shares of Pharmion common stock for $72.00 per share. The acquisition will reportedly strengthen Celgene's position in the haematology/oncology field.
According to the company, the transaction brings together Revlimid, Thalomid and Vidaza therapies, which treat different patient populations worldwide. These products are expected to generate multiple global revenue streams for accelerated revenue and earnings growth over the next five years.
“It's a great move for Celgene,'' said Michael King, an analyst with Rodman & Renshaw. “Vidaza has the potential to be a billion-dollar product.”
November 19, 2007
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