Stay tuned, AnorMed chief tells shareholders

September 20, 2006
Vancouver Sun
By Gillian Shaw


‘Multiple’ parties are interested in Langley biotech, chairman says

AnorMed Inc. has multiple potential buyers lining up, and shareholders should “stay tuned” for new offers.

That was the message from Ken Galbraith, AnorMed’s chairman and interim chief executive, who suggested to shareholders at the company’s annual and special meeting Tuesday that they would do far better to wait than to accept what he termed an “unsolicited, hostile, inadequate offer from Genzyme.”

The Langley biotech, which develops treatments for cancer and AIDS, has been the focus of takeover speculation since August when Genzyme announced it was taking its offer of $8.55 US a share directly to investors.

The company hired Goldman, Sachs & Co. to help evaluate the Genzyme proposal and field inquiries from other potential suitors. The takeover fervour helped propel AnorMed stock well past the offer price, where it remains, closing Tuesday at $9.77 US on the Nasdaq.

In an interview following the meeting, Galbraith suggested Genzyme may return with a new offer, and he said “multiple” parties are interested in the company.

“At some point Genzyme has to say, ‘That was our first offer,’ ” he said.

While Galbraith wouldn’t give details of other companies considering AnorMed, there are a number of them.

“Multiple means it’s not two, three or four, but multiple — more than that,” he said.

While Genzyme’s offer, which was open for acceptance for 35 days, closes in early October, Galbraith said he doesn’t know when shareholders can expect to see competing bids.

“It is not in our control when parties want to bid and how parties want to bid,” he said.

AnorMed also announced Tuesday it will receive $10 million in cash for amending the licence agreement for its proprietary anti-cancer drug picoplatin. Under the terms of the amended agreement with Poniard Pharmaceuticals Inc., AnorMed will receive a cash payment of $5 million US by Oct. 16, with an additional $5 million US due March 31, 2007.

In exchange, the licensed territories for picoplatin will be expanded worldwide to include Japan, AnorMed will forego future development milestones, and royalty payments will be reduced.

AnorMed will continue to receive a reduced potential partnership revenue stream for Poniard within the first year of the amendment and single-digit royalty payments on product sales.

The original agreement gave Poniard exclusive global rights excluding Japan to develop, manufacture and commercialize picoplatin, an intravenous chemotherapeutic agent.

On Monday, AnorMed announced it will receive a $3-million milestone payment from Shire Pharmaceuticals based on the recent licensing approval received in Germany for its Fosrenol treatment. Fosrenol is a treatment for high phosphate levels in the blood, which occurs in patients undergoing dialysis as a result of chronic kidney failure.

Tuesday marked the latest event in a tumultuous year for the Langley biotech which has been the subject to warring factions battling for control, starting last spring with a successful bid by AnorMed’s largest shareholder, the New-York based Baker Brothers Advisors, to oust the board at a special meeting of shareholders. That resulted in the departure of the company’s founder, president and CEO Michael Abrams.