Biotechnology company Celgene (CELG) announced it is buying Abraxis BioScience (ABII) for $2.9 billion in cash and stock. With this acquisition, Ceglene is expanding its portfolio of cancer treatments.
Abraxis shareholders will receive $58 and 0.2617 shares of Celgene for each Abraxis share they own. That values Abraxis shares at $71.93 per share, a 17% premium above its Tuesday closing price of $61.31.
Los Angeles-based Abraxis Bioscience would bring its own cancer medications to add to Abraxis's arsenal, most notably Abraxane, an injectable cancer drug approved for the treatment of breast cancer. Abraxane is also being tested as treatment for melanoma (skin cancer) and pancreatic cancer. If Abraxane is approved for those other uses, the value of the deal could rise by as much as $3.55 billion.
Abraxis BioScience has also developed a proprietary nanoparticle albumin bound (nab) technology, a mechanism of delivery for chemotherapy. It aims to help the medicine break the blood-stroma barrier to reach the tumor cell, and thus achieve better results.
Celgene is known for marketing Revlimid, a treatment of multiple myeloma patients who have received at least one prior therapy; and Vidaza, a treatment for myelodysplastic syndrome subtypes -- a bone marrow disorder.
"The acquisition of Abraxis BioScience is an exceptional strategic fit that will accelerate our strategy of becoming a global leader in oncology." said Bob Hugin, CEO of Celgene Corporation. "
The companies said the transaction is expected to be modestly dilutive to non-GAAP earnings in 2011 and accretive in 2012 and beyond.
Abraxis shares soared over 19%, while Celgene shares fell 5.6% in premarket trading.
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