Shares of AnorMED Inc. surged Tuesday after the biotechnology firm said it will be bought by Millennium Pharmaceuticals Inc. for $515 million.
Shares of AnorMED added $2.70, or 27 percent, to close at $12.65 on the Nasdaq after hitting a new 52-week high of $12.98 earlier in the session. The stock traded between $3.35 to $10.50 previously and has more than doubled since the beginning of the year.
AnorMED said it agreed to be bought out by Millennium for $12 per share, which is 40 percent higher than a Sept. 1 takeover bid of $8.55 per share from Genzyme Corp., which AnorMED advised investors to reject.
AnorMED, a Canadian company, has the right to withdraw, modify or change its support of the offer if it receives a superior bid. But AnorMED could owe Cambridge, Mass.-based Millennium a termination fee of $19.5 million for calling off the deal under certain circumstances.
Shares of Millennium closed unchanged at $10.15 on the Nasdaq.
Millennium, which is also a biopharmaceutical company, said the tender offer will begin within 10 days and be open for at least 35 days.
If the deal is completed, Millennium said it will market AnorMED's Mozobil cancer drug, if approved by the Food and Drug Administration. The drug is in late-stage clinical development and is expected to be launched in 2008. Mozobil helps collect bone marrow stem cells for transplantation in patients with non-Hodgkin's lymphoma and multiple myeloma.
"This proposed acquisition is aligned with our goal to bring in products that accelerate revenue growth, leverage our oncology sales infrastructure and benefit from our development, regulatory and commercial expertise," said Millennium Chief Executive and President Deborah Dunsire.
Goldman Sachs & Co acted as financial adviser to AnorMED, while JP Morgan Securities Inc. and Morgan Stanley acted as Millennium's financial adviser.
Bank of America analyst David Witzke in a client note said he is skeptical of how big a market Mozobil could serve, given that there is already a successful treatment available, called Neupogen, made by biotechnology giant Amgen Inc.
"As a result, we see Mozobil as a niche product used in the salvage setting and are skeptical that it can become an important growth driver for MLNM," he wrote.
He also said Amgen Inc. considered AnorMED as a possible acquisition target, but passed. AnorMED officials could not be reached for comment.
Shares of AnorMED added $2.70, or 27 percent, to close at $12.65 on the Nasdaq after hitting a new 52-week high of $12.98 earlier in the session. The stock traded between $3.35 to $10.50 previously and has more than doubled since the beginning of the year.
AnorMED said it agreed to be bought out by Millennium for $12 per share, which is 40 percent higher than a Sept. 1 takeover bid of $8.55 per share from Genzyme Corp., which AnorMED advised investors to reject.
AnorMED, a Canadian company, has the right to withdraw, modify or change its support of the offer if it receives a superior bid. But AnorMED could owe Cambridge, Mass.-based Millennium a termination fee of $19.5 million for calling off the deal under certain circumstances.
Shares of Millennium closed unchanged at $10.15 on the Nasdaq.
Millennium, which is also a biopharmaceutical company, said the tender offer will begin within 10 days and be open for at least 35 days.
If the deal is completed, Millennium said it will market AnorMED's Mozobil cancer drug, if approved by the Food and Drug Administration. The drug is in late-stage clinical development and is expected to be launched in 2008. Mozobil helps collect bone marrow stem cells for transplantation in patients with non-Hodgkin's lymphoma and multiple myeloma.
"This proposed acquisition is aligned with our goal to bring in products that accelerate revenue growth, leverage our oncology sales infrastructure and benefit from our development, regulatory and commercial expertise," said Millennium Chief Executive and President Deborah Dunsire.
Goldman Sachs & Co acted as financial adviser to AnorMED, while JP Morgan Securities Inc. and Morgan Stanley acted as Millennium's financial adviser.
Bank of America analyst David Witzke in a client note said he is skeptical of how big a market Mozobil could serve, given that there is already a successful treatment available, called Neupogen, made by biotechnology giant Amgen Inc.
"As a result, we see Mozobil as a niche product used in the salvage setting and are skeptical that it can become an important growth driver for MLNM," he wrote.
He also said Amgen Inc. considered AnorMED as a possible acquisition target, but passed. AnorMED officials could not be reached for comment.
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