NEW YORK (Dow Jones)--Celgene Corp. (CELG) agreed to acquire privately held Gloucester Pharmaceuticals Inc. for $340 million plus milestone payments of up to $300 million in a deal to bolster its position in blood cancer treatments.
The deal, Celgene's first major move since buying Pharmion Corp. for $2.9 billion last year, provides the Summit, N.J., company with a product that will launch early next year. Celgene, which had 2008 revenue of $2.3 billion, gets most of sales from blood cancer treatments Revlimid, Thalomid and Vidaza.
Gloucester's Istodax was approved by the Food and Drug Administration last month for treatment of cutaneous T-cell lymphoma, or CTCL, a type of non-Hodgkin's lymphoma, in patients failing prior systemic therapy.
Sanford Bernstein analyst Geoffrey Porges estimates that the drug could see peak annual sales of $150 million to $240 million in CTCL, but he warns that sales will build gradually because of slow disease progress and the long duration of available treatment regimens.
The deal structure highlights a trend of drug makers using structured acquisition agreements with smaller drug developers as a way to acquire assets, while mitigating failure risk and paying only for success."
Celgene pay appr. 3 times the gross sales. If you hold the approved drugs constant that spills over to Epicept (Excuse me for using SEK): Ceplene (in Europe) will have gross sale of 1.2 billion SEK. Three times that divided by todays market cap gives a six (6) times todays value of Epicept.