U.S. Markets closed

BioMarin to buy Prosensa in $840 million deal

Dutch-based biotech firm Prosensa's researchers work on developing, possibly the world's first treatment for Duchenne muscular dystrophy disease (DMD), at their new laboratory in Leiden February 17, 2011. REUTERS/Jerry Lampen

By Vidya L Nathan and Amrutha Penumudi

(Reuters) - BioMarin Pharmaceuticals Inc (BMRN.O) said it would buy Dutch drug developer Prosensa Holding NV (RNA.O) for about $840 million including milestone payments, aiming to add to its portfolio of drugs to treat rare diseases.

The acquisition will give BioMarin worldwide rights to several orphan-drug candidates including drisapersen, which is being developed to treat Duchenne muscular dystrophy (DMD), a rare muscle degeneration disease.

Drisapersen could be the first approved treatment for the rare genetic disease that affects one in 3,600 newborn boys, most of whom die by age 30.

BioMarin will offer $17.75 for every Prosensa share and make two milestone payments of $80 million each following U.S. and European approvals for Prosensa's lead drug, drisapersen.

Excluding milestone payments, the offer represents a premium of 55 percent to Prosensa's last closing price of $11.44.

Prosensa's shares were trading at $18.50 premarket on Monday.

Prosensa has filed for marketing approval of drisapersen, stealing a march on rival Sarepta Therapeutics Inc (SRPT.O), which is conducting mid-stage studies for its DMD drug eteplirsen.

Sarepta received a major setback last month when U.S. regulators asked for more data on eteplirsen, a move that could delay the drug further.

Wedbush Securities analyst Liana Moussatos said the deal made sense for BioMarin, given its history with developing drugs for the indication.

The company dropped its own DMD candidate in 2010, after the drug failed early-stage studies. (http://reut.rs/1viCDST)

Both Sarepta and Prosensa from use the same mechanism in their DMD treatments. The drugs skip a faulty section of a gene to produce a protein called dystrophin, the lack of which causes the disease.

Prosensa is developing two other DMD drugs, which are currently being tested in early and mid-stage studies. It is also testing drugs to treat Huntington's disease.

BioMarin's shares were unchanged before the bell.