AnorMed to be Acquired by Millennium Pharmaceuticals

On Tuesday, September 26, drug developer AnorMed announced its agreement to be acquired by Millennium Pharmaceuticals in a deal valued at $12 a share for a total worth of $515 million. The news came on the heels of AnorMed's rejection of a Genzyme Corp.'s hostile bid of $380 million three weeks ago. The deal with Millennium represents a premium of 40 percent over the previous offer.,

Investors apparently feel AnorMed is still being undervalued as company shares on the Nasdaq rose some 28 percent in response to the announcement, from $2.79 to $12.74 after trading at a 52-week high of $12.98.

Current interest in AnorMed is driven by the drug Mozobil and further interest has been sparked by the company's experimental treatment for HIV/AIDS that is still in development. Given Millennium's focus on hematology and oncology the two companies are a good fit. Millennium's leading product is a treatment for relapsed multiple myeloma called Velcade, sold domestically by Millennium and internationally by Johnson & Johnson.

Sales for Velcade are forecast to hit somewhere between $225 million and $250 million for the year, an increase of between 17 to 30 percent over 2005. AnorMed will seek approval from the U.S. Food and Drug Administration for Mozobil in 2007. The drug claims to trigger the rapid movement of stem cells from bone marrow into circulating blood for collection in potentially life saving stem cell transplants in cancer patients. There are also plans to market Mozobil as a leukemia treatment, a market representing an annual return of $300 million.

Much of the interest in AnorMed, based out of Langley, B.C., has been generated by biotechnology investor Felix Baker who began pushing for a change in AnorMed's board of directors at the end of 2005. At that time shares in the company's stock were trading in a range of $4 to $5.