Bayer in $2.9 billion Algeta deal
pharmafile | December 19, 2013 | News story | Sales and Marketing | Algeta, Bayer, oncology, xofigo
Bayer and Algeta have decided to avoid the usual M&A dance, opting instead to agree a business deal with little fuss.
Bayer put in its initial offer to buy Oslo-based Algeta in late November, and just three weeks’ later Algeta has agreed to a $2.9 billion buyout deal worth $500 million more than was first offered.
Bayer’s preliminary proposal was for 336 kroner per share, which would have amounted to a total deal worth around $2.4 billion.
It will now start to buy Algeta shares at 362 Norwegian kroner ($59) each, the Leverkusen, Germany-based firm said in a statement. It will pay a total of $2.9 billion for Algeta at this price – or 17.6 billion kroner in local currency.
Bayer said that it expects to close the transaction during the first quarter of next year.
The primary reason for the purchase is for Bayer to gain full access to Xofigo (radium Ra 223 dichloride), a new cancer treatment which it co-markets with Algeta in the US.
The drug is licensed by the FDA to treat castration-resistant prostate cancer which has spread to bone tissue, and was approved in Europe in the same indication in November.
Bayer acquired the rights to the treatment in a 2009 deal with Algeta worth $800 million, and owning Algeta would give the company complete control over the drug, which brought in $17 million in the third quarter of this year – but from which much more is expected.
Bayer’s chief executive Marijn Dekkers said in the statement: “We have already successfully collaborated with Algeta to develop and commercialise the cancer drug Xofigo.
“The planned acquisition would give us full control over Xofigo. We are absolutely convinced of the potential of this drug and the underlying technology to provide patients with innovative treatment options.”
Algeta predicts annual worldwide sales of Xofigo will reach more than $1 billion by 2018, while Thomson Reuters Pharma predicts a slightly lower $940 million by the same time.
Xofigo’s rivals include J&J’s Zytiga (abiraterone acetate) and Astellas & Medivation’s Xtandi (enzalutamide), which are currently much bigger sellers with larger predicted peak sales.
Stein Holst Annexstad, chairman of the board of directors of Algeta, said: “Having worked with Bayer since 2009, the board of directors is convinced of Bayer’s commitment to establishing Xofigo globally, and maximising its blockbuster potential.
“We are also pleased that Bayer intends to further invest in the potential of Algeta’s Targeted Thorium Conjugate (TTC) research platform,” he added.
Ben Adams
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