Genzyme Corporation AnorMED Inc. have executed a mutually beneficial support agreement under which Genzyme will acquire AnorMED in an all cash transaction valued at US$13.50 per outstanding share, or approximately US$580 million.
Through this transaction, Genzyme is acquiring Mozobil, a leading late-stage product candidate in development for haematopoietic stem cell transplantation. Mozobil is being tested in phase III clinical trials and is expected to launch in 2008, a. Genzyme release said.
"We are very pleased to have reached agreement with AnorMED, and look forward to completing the development and commercialization of Mozobil," stated Henri A. Termeer, chairman and chief executive officer of Genzyme Corporation. "We believe that Mozobil will be an important therapeutic advance in the field of stem cell transplantation, and are eager to utilize our global clinical, regulatory and commercial infrastructure to ensure that it reaches patients around the world. This is a strategic fit for us that complements our existing transplant and oncology businesses."
Kenneth Galbraith, the chairman of the board and interim chief executive officer of AnorMED, said "AnorMED's board of directors, in consultation with its Strategic Initiatives Committee and with the advice of its financial and legal advisors, believes the amended US$13.50 per share offer represents the best alternative currently available to AnorMED shareholders and provides a certain and fair value for AnorMED shareholders. The board unanimously recommends that AnorMED shareholders accept and tender their shares to the amended Genzyme offer."
Kenneth Galbraith and the Baker Bros. affiliates have signed shareholder support agreements with Genzyme to tender their shares to Genzyme's amended bid when it is filed, subject to their ability to withdraw such support in the event of a superior competing proposal prior to the expiry of the Genzyme offer.
Genzyme plans to commercialize Mozobil through its existing global transplant business to hematologists and bone marrow transplant centers in more than 50 countries throughout the world.
Mozobil has been shown in multiple earlier studies to rapidly increase the number of stem cells in circulation in the blood, an important step in preparing a patient for a stem cell transplant. Increasing the number of stem cells collected can improve patient outcomes in two ways: by helping patients who were previously not eligible to meet the target ranges needed for a transplant; and by raising the level of stem cells collected in those already eligible, thereby improving the viability of the transplant.
According to Genzyme, approximately 55,000 stem cell transplants are performed each year for multiple myeloma, non-Hodgkin's lymphoma, and other conditions in markets where Genzyme has a commercial infrastructure, including the United States, Europe, Latin America and the Asian Pacific countries. A majority of these patients could potentially benefit from the use of Mozobil.
Enrolment is complete in a pivotal phase III trial for Mozobil in multiple myeloma, and a second pivotal phase III trial in non-Hodgkin's lymphoma is expected to complete enrolment soon. Mozobil has been granted orphan drug status in the United States and European Union and AnorMED has entered into a special protocol assessment agreement with the FDA.
Genzyme's acquisition of AnorMED will take the form of an all cash tender offer to acquire all outstanding shares of AnorMED, which will expire at 8:00 a.m. (Vancouver time) on November 6, 2006. Genzyme may elect to extend its existing offer again by giving notice of such extension to AnorMED shareholders, a copy of which will be filed with the securities regulatory authorities in Canada and the United States and which should also be made available by such authorities through the Internet at www.sedar.com or www.sec.gov. AnorMED shareholders who have already tendered and have not withdrawn their shares to Genzyme's offer need to take no further action to accept Genzyme's offer. All AnorMED shareholders are eligible to receive the offer price per share of US$13.50, including shareholders who have already tendered their shares. As of 8:00 a.m. on October 17, 2006, approximately 3,120 AnorMED shares had been tendered and not withdrawn to Genzyme's offer.
The support agreement with Genzyme also provides AnorMED with the right to withdraw, modify or change its support regarding Genzyme's tender offer of US$13.50 per share in cash only if AnorMED's Board of Directors receives a superior proposal prior to the expiry of the Genzyme tender offer. Genzyme has the right to match any such superior proposal made by another bidder. If AnorMED's Board accepts a superior proposal after Genzyme does not match such proposal, Genzyme may be entitled to a payment of US$19.5 million from AnorMED.
The transaction has been approved by the Boards of Directors of both companies and is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act. It is expected to be dilutive to Genzyme's GAAP earnings through 2008 and accretive in 2009.
In association with the acquisition, Genzyme anticipates it will incur certain one time charges, which will be detailed after the close of the transaction.