Japanese firm pays $8.8 billion for U.S. biotechnology company
Japan’s largest drug company, Takeda Pharmaceutical, agreed on Thursday to pay $8.8 billion in cash for Millennium Pharmaceuticals, one of the earliest American genomics companies, in a deal that spurred a general rise in biotechnology stocks.
The $25-a — share deal represented a 53 percent premium to Millennium’s closing price on Wednesday and set off speculation that other biotechnology companies might be acquired at high valuations, particularly by foreign companies that can take advantage of the weak dollar.
The Amex Biotechnology Index was up nearly 5 percent on Thursday. Millennium shares were up nearly 50 percent for the day, closing at $24.34, a gain of $7.99. “Anyway you cut it, it’s expensive based on today’s numbers,” Kurt von Emster, portfolio manager for the MPM BioEquities Fund, said of Takeda’s purchase. He said the deal showed that biotechnology companies “are valued more greatly by strategic buyers than they are by investors.”
The acquisition will give Takeda control of Millennium’s cancer drug Velcade, which is used to treat multiple myeloma, a blood cancer. Sales of Velcade in the United States reached $83.5 million in the first quarter of 2008, up 42 percent from a year earlier, in part because of new data showing the drug’s effectiveness.
Source: nytimes.com