Bayer to acquire Algeta in $2.9 B deal
Healthcare and agricultural products maker Bayer AG said it will be purchasing Algeta ASA for a price tag of NOK 17.6 billion or $2.9 billion, Bloomberg reported. Algeta, which develops targeted treatments for cancer patients, is Bayer's partner on the development of a prostate cancer drug. The deal will enable Bayer to get control of the drug as well as its experimental radiation therapies, the report said.
Bayer raised its offer in order to acquire the Norwegian firm. Last month, Algeta said it received a preliminary bid from Bayer for NOK 336 per share but the Leverkusen, Germany-based drugmaker said it had increased that offer to NOK 362 apiece, the report said.
In a statement, Bayer Chief Executive Officer Marijn Dekkers said, "We are absolutely convinced of the potential of this drug and the underlying technology to provide patients with innovative treatment options."
The prostate-cancer drug is Xofigo. According to Bayer, this and other new medicines will allow Bayer to grow as earnings in its plastics division has slowed. Since the German drugmaker is financing some medical trails for the prostate cancer therapy, it would not have to share profits give royalties for the therapy after it would acquire it. The report also said that the US Food and Drug Administration had already cleared Xofigo for the treatment of secondary cancer that has spread to the bones.
Xofigo is one of the five drugs tapped by the German drugmaker to have combined sales potential of over €5.5 billion or $7.5 billion annually, a BloombergBusinessweek report which appeared on November 26 said. The report also cited the average estimates of seven analysts who expected that the therapy will generate sales amounting to €494 million by 2016.
The American Cancer Society said that after skin cancer, prostate cancer is the most common cancer afflicting men.