Gynzyme to buy Bioenvision - and co-developed clofarabine - in $345M deal

Biotechnology major Genzyme Corp says it has reached to acquire fellow USA-based Bioenvision, in an all-cash transaction of $5.60 a share, or a total of around $345.0 million. This represents a premium of about 50% on Bioenvision's share price over the last 20 trading days and the news sent the latter's stock up 7.1% to $5.62 in morning trading on May 29, while Genzyme's edged up 2.1% to $62.55. The deal has the support of both boards of directors and is expected to close in July.

Although the acquisition is expected to be around $0.06 a share dilutive to Genzyme's 2007 earnings, it means the company gets worldwide rights to clofarabine, which the two companies co-developed in Europe, where Bioenvision currently markets the product as Evoltra for the treatment of acute lymphoblastic leukemia (ALL) in relapsed and refractory pediatric patients. The deal is forecast to be accretive in 2009.

Clofarabine is also being developed by Genzyme and Bioenvision for significantly larger indications, including use as a first-line therapy for the treatment of adult acute myeloid leukemia (AML). The drug carries the trade name Clolar in the USA and Canada, where it is marketed by Genzyme for relapsed and refractory pediatric ALL patients. It has been granted Orphan Drug status for ALL and AML in both the USA and the European Union.