The Deal: Genzyme Corporation has agreed to acquire Ilex Oncology Inc. in a stock transaction valued at over $1 billion. Under the terms of the agreement, each share of Ilex Oncology will be exchanged for $26 of Genzyme stock. The deal is expected to close by the middle of the year.
Discussion: Ilex Oncology is a biotechnology company that performs oncology research and develops drugs for the treatment of bladder cancer, solid tumors, and other forms of cancer. The company's leading drug product, Campath, is used as a treatment for chronic lymphocytic leukemia. The company is also developing a possible treatment for blood cancers and solid tumors. Campath is sold through German pharmaceutical company Schering AG.
Genzyme Corporation operates three main divisions. Genzyme General provides drug development, genetic testing and other services. Genzyme Molecular Oncology develops gene-based cancer diagnosis and treatment products.
Genzyme Biosurgery manufactures orthopedic medical and surgical products.
The acquisition will expand Genzyme's oncology division. Genzyme's cancer-research program costs about $20 million a year. The program's nearest-term prospect, a kidney-cancer vaccine, is at least four years away from market approval. Ilex, however, has immediate and near-term oncology products. Sales of Campath reached $71.7 million last year, an increase of 63 percent from sales in 2002.
Copyright NVST, Inc. Mar 8, 2004
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