Bayer confirms plans to acquire Norway’s Algeta

German drugs and chemicals major Bayer (BAYN: DE) has officially announced its intention to acquire Norwegian pharmaceutical company Algeta (OSE: ALGETA), its partner on prostate cancer drug Xofigo (radium Ra 223 dichloride), to further strengthen its oncology portfolio.

Last month, the Oslo-based company said it has received an approach form Bayer (The Pharma Letter November 26), and today Algeta said that its board has recommended acceptance of the Bayer cash offer, of 362 Norwegian kroner per share, equal to some 177.6 billion kroner (2.1 billion euros; $2.87 billion). The Offer price represents a 37% premium to Algeta’s closing share price on November 25 and a 48% premium to the three-month volume weighted average stock price on November 25, the last trading day prior to the announcement of Bayer’s preliminary acquisition proposal.

"We have already successfully collaborated with Algeta to develop and commercialize the cancer drug Xofigo. The planned acquisition would give us full control over Xofigo. We are absolutely convinced of the potential of this drug and the underlying technology to provide patients with innovative treatment options," commented Bayer chief executive Marijn Dekkers.

As well as the Algeta board recommendation, Bayer says it has obtained pre-acceptances for about 14 % of the shares in Algeta, including pre-acceptances from all members of Algeta's board of directors as well as from Algeta's largest shareholder.

Current collaboration

Bayer and Algeta have collaborated since 2009 to develop and commercialize radium-223 dichloride, which was approved in the USA in May 2013 under the trade name Xofigo and is being co-promoted there by Algeta and Bayer. The European Commission granted marketing authorization for the product in November (TPL November 15). Algeta has said in the past it believes Xofigo (previously known as Alpharadin) could achieve $1.3-$1.6 billion or more in peak annual sales.