The logo of Bayer is seen at the company’s headquarters in Leverkusen, Germany (file). Bayer has offered to pay $2.4bn for Norway’s Algeta, its partner for a new prostrate cancer treatment, at a 27% premium to the stock’s last close, Algeta said.
Reuters
|
|
Bayer has offered to pay $2.4bn for Norway’s Algeta, its partner for a new prostrate cancer treatment, at a 27% premium to the stock’s last close, Algeta said yesterday.
The deal would boost Bayer’s drugs division by giving it outright control over Xofigo, a drug the two have developed jointly since 2009 and started selling in the US this year.
Investors, however, bet that the German drugs and chemicals group has a fight on its hands and Algeta’s chief financial officer said that rival bids could not be ruled out.
The Norwegian company said it was in early discussions that might or might not lead to a transaction. A Bayer spokesman confirmed it had made an offer but said it did not want to provide details at this point.
The decision to go public with the preliminary offer followed a leak in the German media overnight.
Algeta CFO Oystein Soug declined to comment on the level of the bid but told Reuters that his company is under no pressure to do a deal. “I think this company has great prospects on a standalone basis,” he said in a telephone interview.
Asked if another company might be in a position to counter Bayer’s offer, he said: “I would not exclude that opportunity, but of course that is not my call.”
For Bayer, Algeta fits with chief executive Marijn Dekkers’ strategy of driving growth by building up the pharmaceuticals division, which now overshadows chemicals in importance.
The push by large pharmaceuticals companies to acquire smaller biotech businesses to gain new drugs that could bolster income is focusing increasingly on cancer therapy.
Amgen struck the fifth-largest biotechnology deal in history in August by agreeing to buy Onyx Pharmaceuticals for $10.4bn, while the Japan’s Otsuka agreed in September to buy Astex Pharmaceuticals for $886mn.
Other recent cancer deals have included AstraZeneca buying privately-owned firms Amplimmune and Spirogen for up to $940mn.
Algeta is also researching other drugs, including an innovative radioactive treatment delivered directly to tumours.
Although Xofigo sales reached only $17mn in the third quarter, it received marketing authorisation in the European Union this month and analysts expect sales to take off over the next several years.
Annual worldwide sales are expected to reach $940mn by 2018, according to consensus forecasts compiled by Thomson Reuters Pharma, while Algeta says its own round-up of analyst forecasts puts sales well above $1bn by that time.
Despite the promise of Xofigo, analysts following Bayer said the German group appeared to be offering a high price.
Under the current deal between the companies, Bayer is responsible for developing the drug, applying for health authority approvals and commercialising. Bayer and Algeta share profits equally in the US and Bayer pays royalties to Algeta on sales elsewhere.
Algeta shares have soared this year on the early success of the drug and the offer price is 125% above the stock’s level 12 months ago.