Bayer targets Norway’s Algeta
pharmafile | November 27, 2013 | News story | Sales and Marketing | Algeta, Bayer, oncology, xofigo
Bayer HealthCare is in the market to buy Norwegian oncology specialist Algeta.
The German pharma group has made a bid for Oslo-based Algeta, and the latter has confirmed a preliminary offer, saying only that the proposal “may or may not lead to a transaction”.
Bayer is bidding 336 Norwegian crowns (NOK) per share: this amounts to valuing the company, which is listed on the Oslo stock exchange, at $4.2 billion.
“Discussions are at an early stage and further announcements may be made, as appropriate, in due course,” a statement from Algeta said.
The company has a subsidiary, Algeta US, which is based in Cambridge, Massachusetts and focusses on marketing operations – but the jewel in the crown for Bayer in this potential transaction is Xofigo (radium Ra 223 dichloride), a new cancer treatment which the companies co-market in the US.
The drug is licensed in the US to treat castration-resistant prostate cancer which has spread to bone tissue, and was approved in Europe in the same indication earlier this month.
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.
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.
The intravenous treatment works by specifically targeting cancerous bone tissue, attacking tumour cells with short-range alpha radiation, which serves to minimise damage to healthy cells.
The European authorisation which came after a CHMP recommendation in September, is based on a prematurely halted Phase III trial which showed the drug significantly extended overall survival compared to placebo.
Around 910,000 cases of prostate cancer were recorded in 2008, with some of the highest incidence rates in west and north Europe, according to the World Cancer Research Fund. Global incidence is expected to nearly double by 2030.
Xofigo’s rivals include J&J’s Zytiga (abiraterone acetate) and Astellas & Medivation’s Xtandi (enzalutamide), which are currently much bigger sellers.
Adam Hill
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