With an eye to burnishing its oncology rep and its already sizable revenue, Celgene has struck a deal to buy Abraxis BioScience for cash and stock totaling $2.9 billion. The buyout gives Celgene control of Abraxane, now approved for breast cancer treatment, along with its discovery platform and a pipeline of experimental therapies.
In exchange for every share of Abraxis, Celgene will pay $58 a share in cash and 0.2617 of a share of Celgene. That values Abraxis' shares at $71.93, a 17 percent bump on yesterday's close. Abraxis shareholders also stand to gain up to $650 million in additional milestone payments if Abraxane is approved for lung and pancreatic cancers. In addition to a slate of ongoing trials for Abraxane, Abraxis has one mid-stage trial underway, a Phase I and three preclinical programs listed on its website.
Celgene clearly believes that it can do a better job marketing Abraxane. Abraxis parted ways with its initial marketing partner, AstraZeneca, in late 2008 after the pharma giant registered disappointing results on Abraxane. With the prospect of add-on approvals for new indications and a larger sales force, though, Celgene could generate bigger sales.
"We are excited by the opportunity to leverage our clinical, regulatory and commercial capabilities to provide metastatic breast cancer patients with an innovative treatment in Abraxane," said Bob Hugin, chief executive of Celgene. Celgene has $2.7 billion in annual revenue, making it one of the biggest biotechs in the industry.
"Our nab technology platform is changing the treatment paradigm for difficult-to-treat cancers," said Patrick Soon-Shiong, M.D., executive chairman of Abraxis, in a release. "In Celgene we have found the ideal partner to further expand the reach of Abraxane and our other treatments, in order to improve the lives of patients worldwide."