Specialty drugmaker Jazz Pharmaceuticals (JAZZ) said Monday that it is buying little biopharma Celator Pharmaceuticals (CPXX) for $1.5 billion in cash, sending the latter’s already-surging stock soaring.
Celator went people in November 2013 and failed to make an impression on the subject of the stock market until last March 14, once it reported favorable late-phase trial outcomes for Vyxeos, its therapy for high-threat acute myeloid leukemia (AML). Vyxeos is a co-formulation of the chemotherapy drugs cytarabine and daunorubicin, utilizing Celator’s proprietary CombiPlex platform. In the trial, it lengthy general survival for much longer compared to both drugs conducted separately.
The complying with day the stock popped from listed here 2 to near 9 and continued to climb after that, closing at 17.53 on the subject of Friday. Jazz agreed to a big premium on the subject of that, of 30.25 a share, noting that Vyxeos is established to have actually seven years’ exclusivity via the FDA’s orphan drug designation.
“As Celator is currently preparation a regulatory submission in the U.S. for Vyxeos, this purchase would certainly include a brand-new orphan product along with the potential for short- and long term revenue generation and expansion of our worldwide commercial platform,” Jazz CEO Bruce Cozadd said in a statement.
Vyxeos is expected to strike the market in late 2017.
“Assuming sell-edge consensus forecasts of $2twenty million by 2021 are directionally accurate, Jazz is paying 4 times peak sales of $350 million to $400 million for the de-risked indication which looks relatively fair, yet Jazz could possibly provide upside either from (1) better secondary AML sales or (2) via expanding the Vyxeos label in to various other AML patient populaces and various other blood cancers,” wrote Leerink analyst Jason Gerberry in a study note.
Celator stock was up 71% in early morning trading on the subject of the stock market today, near 30. Jazz stock was down a fraction, near 151.
Jazz currently has actually a little presence in blood cancer along with Erwinase, a chemotherapy regimen for acute lymphoblastic leukemia, yet its main resource of earnings is narcolepsy therapy Xyrem, whose maturing patents are under challenge. With its Q1 earnings report this month, Jazz announced a settlement along with 2 of its generic challengers, yet various other situations continue to be outstanding.
Also in its 10-Q filing Jazz revealed that it possessed received a federal subpoena to investigate its partnership along with co-pay sustain charities, a subject of growing interest to legal authorities lately, as a result of allegations that they sustain higher drug prices. Huge biotechs Biogen (BIIB) and Gilead Sciences (GILD) have actually Likewise been targeted along with comparable subpoenas.
