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Pharmaceutical industry

Biotech Bidding War Ends with Genzyme's Acquisition of AnorMed

Strategic Insights

— 1 min read

Genzyme Corp. declared victory in the first major bidding war in the biotechnology industry, acquiring AnorMed Inc. for $580 million, after a hostile bid from Cambridge rival Millennium Pharmaceuticals Inc. failed to materialize. Millennium had hoped to notch its first major deal by buying AnorMed, a Canadian firm developing an experimental cancer treatment, but conceded the fight early yesterday morning, acknowledging the price had gotten too high to justify the risks involved. The deal concludes a saga that began more than a year ago, when Genzyme and Millennium independently began talks with AnorMed to license the company's leading potential drug, Mozobil.

Key Takeaways:

  • Genzyme's hostile bid valued AnorMed at $13.50 a share, nearly 60 percent higher than the original bid of $8.55 a share.
  • The acquisition is a significant blow to Millennium Pharmaceuticals, which had hoped to acquire AnorMed's experimental cancer treatment, Mozobil.
  • The deal concludes a year-long saga, with Genzyme and Millennium competing to license AnorMed's potential drug, Mozobil.
  • The breakdown fee for Millennium is $19.5 million, as negotiated in September.
  • AnorMed's management had urged shareholders to reject the original $380 million hostile bid from Genzyme as too low.
  • Genzyme expects to close the purchase of AnorMed on November 6, pending approval from AnorMed shareholders and US antitrust regulators.
  • Millennium is still struggling to turn a profit, despite having more than 1,000 employees and $630 million in the bank.

Statistics:

  • The terms of the deal valued AnorMed at $13.50 a share, an increase of 55.8% from the original bid of $8.55 a share.
  • The blockage fee for Millennium is $19.5 million.
  • Genzyme's acquisition of AnorMed is valued at $580 million.
  • Millennium has $630 million in the bank.
  • Wall Street analysts expect Mozobil to sell $100 million to $300 million annually.

Sources:

  • The Boston Globe, October 18, 2006
  • "Biotech Bidding War Ends with Genzyme's Acquisition of AnorMed" by Stephen Heuser, October 18, 2006.

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