Celgene Corporation (NASDAQ: CELG)and Abraxis BioScience Inc. (Nasdaq: ABII) today jointly announced the signing of a definitive merger agreement. The upfront payment values Abraxis BioScience at approximately $2.9 billion, net of cash.
"No one is likely to argue that this was a bargain price" for Abraxis, Sanford Bernstein analyst Geoffrey Porges wrote in a note to clients, expecting the valuation to be scrutinized by investors. Regardless, Mr. Porges sees the deal as positive for Celgene, as it remains focused on cancer treatment and can leverage its global commercial infrastructure.
RBC Capital Markets projected that Abraxane would be approved by the Food and Drug Administration in 2012 for use in lung cancer and late-stage data would be available in pancreatic cancer in 2013.
Although it was approved in 2005, revenue from the drug has been relatively flat in recent years, coming in at $314.5 million last year, $335.6 million in 2008 and $324.7 million in 2007. Celgene is clearly looking ahead to the future opportunities for Abraxane, as demonstrated by projecting the deal to add $1 billion in revenue by 2015.
Abraxane, (formerly called nab-paclitaxel), was approved as treatment of locally advanced or metastatic NSCLC in combination with carboplatin after a phase III trial that found the drug outperformed paclitaxel, with an overall response rate (ORR) among clinical trial participants of 33% vs 25%, respectively. Notably, the ORR was higher for Abraxane than paclitaxel among subgroups of patients with squamous cell carcinoma (41% vs 24%) and large cell carcinoma (33% vs 15%). The most common adverse reactions (≥20%) reported were anemia, neutropenia, thrombocytopenia, alopecia, peripheral neuropathy, nausea, and fatigue.