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Biotech / Medical : Munch-a-Biotech Today

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To: Biotech Jim who wrote (2886)	7/1/2010 11:10:09 AM
From: keokalani'nui	of 3158

BOSTON (Reuters) - U.S. biotechnology company Celgene Corp (NasdaqGS:CELG - News) has agreed to acquire Abraxis BioScience Inc (NasdaqGS:ABII - News), which makes an innovative chemotherapy treatment, for $2.9 billion in cash and stock. The deal gives Celgene, which makes the blood cancer drugs Thalomid and Revlimid, a new plank in its expanding oncology portfolio. And it will give the company an expected $1 billion a year in added revenue by 2015. Abraxis's main product is Abraxane, a solvent-free drug that combines the chemotherapy agent paclitaxel with albumin, a naturally occurring human protein that wraps around the drug and allows it to be administered to patients in higher doses. The drug generated revenue in 2009 of $314.5 million. "It looks like they're paying a lot, but the fit is good and Celgene has a lot of cash," Summer Street Research analyst Carol Werther said. "I would expect them to continue to look for other products and companies that fit well with them." Celgene will pay $58 in cash and 0.2617 of Celgene stock for each Abraxis share, implying a price of $71.93 a share based on Tuesday's closing share prices -- or a premium of 17 percent to Abraxis's closing price on Tuesday of $61.31. In addition, shareholders will receive up to $650 million in milestone payments and royalties should the company meet certain development goals. According to Werther, the payments are worth an additional $6 a share to Abraxis shareholders. Abraxis shares rose 19.6 percent to $73.33 in premarket electronic trading on Nasdaq on Wednesday. Celgene's shares fell 4.8 percent to $50.75.

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