BIIB , CEPH ,,, Cephalon to Buy Cancer Drug Developer
Thursday May 12, 5:14 pm ET
Cephalon to Buy Private Developer of Cancer Drugs for $160 Million
FRAZER, Pa. (AP) -- Drug maker Cephalon Inc. said Thursday that it is buying Salmedix Inc., a developer of blood cancer treatments, for $160 million in a move to strengthen its cancer portfolio.
Cephalon said the cash deal -- which also includes additional milestone payments -- will dilute its 2005 earnings by 10 cents to 15 cents per share, adding that it plans to revise year-end guidance after the deal closes.
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Salmedix, a private company which made a preliminary filing to go public a year ago, is running mid-stage clinical trials evaluating its Treanda drug as a treatment for non-Hodgkin's lymphoma for with patients who have not responded to Biogen Idec Inc.'s Rituxan treatment. The company is also studying the drug as a complement to Rituxan.
San Diego, Calif.-based Salmedix also has two other product candidates in mid-stage trials.
Frank Baldino Jr., Cephalon's chairman and chief executive, said in a statement that the acquisition "gives us the opportunity to advance our entry into the oncology marketplace with multiple product candidates."
Cephalon said it will pay an additional $40 million to Salmedix as its drugs reach certain development benchmarks.
The companies expect the acquisition to close in the second quarter. At close, Salmedix is expected to have about $25 million in cash on hand, after transaction expenses. The agreement is subject to certain closing conditions, including regulatory approvals.
Under the agreement, Cephalon gets all rights to market Treanda in the United States and Canada. Cephalon shares fell 53 cents to $44.60 in after-hours trading.
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