Genzyme's new offer for AnorMed tops Millennium's

October 11, 2006
Globe and Mail
By Leonard Zehr

Raises hostile bid by $200-million (U.S.), but board must support it by 7 p.m. tonight

Biotech giant Genzyme Corp. must have liked what it saw after it had a look at drug developer AnorMed Inc.'s internal documents, because it raised its hostile takeover offer by $200-million (U.S.). Genzyme yesterday said it is prepared to sweeten its hostile bid for AnorMed to $580-million from an original $380-million, provided the AnorMed board throws its support behind the $13.50-a-share offer by 7 p.m. tonight. The Genzyme offer would top a friendly $515-million deal from Millennium Pharmaceuticals Inc. by 12.5 per cent.

But investors are still betting the battle for AnorMed isn't over. Shares of the Vancouver-based company rose 68 cents or 5 per cent to $13.98 after touching a 52-week high of $14.13 on the Nasdaq Stock Market yesterday.

"$13.50 is pretty close to a knockout punch," said Brian Bapty, an analyst at Raymond James. "Even though the market is expecting another bid, I think we're nearing the endgame."

AnorMed officials declined comment and Millennium couldn't be reached for comment.

Cambridge, Mass.-based Genzyme, which has been pursuing AnorMed since August, said it proposed revising its tender offer after completing additional due diligence about the company's flagship Mozobil drug and other assets.

Mozobil is being evaluated in two late-stage clinical studies and, if successful, could be launched in late 2008. The drug is designed to trigger the rapid movement of stem cells out of bone marrow and into circulating blood, where they are collected for use in stem-cell transplants. Transplants are used to restore the immune systems of cancer patients after chemotherapy.

Analysts suggest stem-cell transplants represent an annual market of $200-million to $300-million based on some 55,000 procedures performed to treat multiple myeloma, non-Hodgkin's lymphoma and other conditions in the United States, Europe, Latin America and the Asian Pacific countries.

Genzyme said it would sell Mozobil through its existing global transplant business, which already sells a drug to hematologists and bone-marrow transplant centres in more than 50 countries.

Analysts say Genzyme is also interested in Mozobil as a potential new use to treat leukemia. Early research indicates that the drug triggers the release of leukemia cells from bone marrow into the bloodstream, where they can be targeted by chemotherapy drugs.

AnorMed is also scheduled to release clinical data about a potential new HIV drug in February.