Celgene Corporation, an independent biopharmaceutical company, has signed a definitive agreement to acquire Anthrogenesis Corporation, a privately held biotherapeutics company pioneering the recovery of stem cells from human placental tissue following the completion of a full-term, successful pregnancy. These stem cells can be used in bone marrow transplants for cancer patients, particularly hematological cancers such as multiple myeloma and leukemia, in conjunction with chemotherapy and radiation therapy. This acquisition follows previously announced research collaboration between Celgene and Anthrogenesis to evaluate the ability of Celgene's small molecule compounds to influence stem cell differentiation. Anthrogenesis will operate as a wholly owned subsidiary of Celgene.
The acquisition gives Celgene access to Anthrogenesis' proprietary technologies for the recovery of large quantities of high-potential stem cells and other valuable biomaterials from human placental tissue, currently an unused byproduct of over four million annual U.S. births. From a single placental source, Anthrogenesis is able to produce multiple stem cell transplant units that exceed current adult dosing standards for use in bone marrow transplants. From the same placental source, Anthrogenesis also recovers large quantities of very early-stage stem cells that appear to have many of the characteristics attributed to embryonic stem cells. Unlike the embryo, the placenta is a non-controversial source of stem cells. Several pending U.S. and international patents cover Anthrogenesis' proprietary methods for collecting, processing, storing and the clinical use of placental stem cells.
Under the terms of the agreement, Celgene will acquire all Anthrogenesis outstanding shares in a tax-free, stock-for-stock merger that will be accounted for by the purchase method of accounting. Celgene expects to issue 1.45 million common shares and 1.12 million options and warrants at an exchange ratio of .4545 per share of Anthrogenesis common stock and warrants, implying a fully diluted purchase price of approximately $45 million using the treasury stock method. Should Anthrogenesis achieve certain objectives, the exchange ratio could be adjusted upwards to a maximum of .50. Celgene expects the merger with Anthrogenesis to be $0.05 to $0.10 dilutive to earnings in 2003, $0.05 to $0.10 accretive in 2004, and to have a positive impact on earnings thereafter.
Celgene will be able to provide stem cell transplant units sourced by Anthrogenesis as a therapeutic offering to oncologists treating hematological cancers. More than 100,000 people in the U.S. are diagnosed annually with blood cancers that can be treated by stem cell transplants; however, only a fraction receive transplants due in part to inadequate sources of adult doses of therapeutic stem cells.
Through the acquisition of Anthrogenesis and its Lifebank division, Celgene will also become a leader in the business of private stem cell banking -- collecting, processing and storing stem cells retrieved at the time of birth from the placenta and umbilical cord blood, for family use. Anthrogenesis is a licensed blood bank and a FDA-registered cell therapy company.
"Through this strategic acquisition we will leverage our commercial and scientific franchises and complement our pipeline of oncology products," said John W. Jackson, chairman and chief executive officer of Celgene Corporation. "Anthrogenesis' advanced technologies will help address some of the serious difficulties associated with helping stem cell therapy reach its significant potential, including the current inability to reliably meet adult dose standards, the shortage of suitable donors, and the long wait to find an appropriate donor. Anthrogenesis' exploration of the human placenta makes it possible to envision a large, renewable source of stem cells for use in a wide range of scientific applications."
"Anthrogenesis shares a common vision with Celgene to deliver better therapies for cancer and other serious diseases and we are joining Celgene to build upon our existing research collaborations and to accelerate the development and commercialization of our products," said Robert J. Hariri, M.D., Ph.D., founder, chairman and chief science officer of Anthrogenesis Corporation. "The collaborations have produced breakthrough results and we see vast scientific promise in combining our work in placental stem cells with Celgene's own programs to develop orally available drugs for the treatment of cancer, and longer term, for immune and metabolic disorders and neurological diseases."