Canada's Cangene Finds Sympathetic Shareholder

Not much more than a year after fending off a hostile bid, Canadian biotechnology company Cangene has said it will buy Winnepeg-based Rh Pharmaceutical from Canadian generics company Apotex, for sufficient common stock to give Apotex an 83% stake in Cangene.

The deal is estimated to be worth C$18-20 million ($13.2-14.7 million) by the Globe & Mail newspaper, and "marks the end of Cangene's year-long search for a sympathetic, deep-pocketed shareholder." Apotex has also agreed to invest an additional C$30 million in the newly combined biotechnology company over the next five years.

Cangene has also said that is will distribute almost all the cash now in hand to existing shareholders (excluding Apotex), including the C$22 million which it received through a licensing deal on its diagnostic technology with Japan's Toyobo and the Netherland's Organon Teknika (Marketletter May 29).