Celgene Corp agreed to buy Juno Therapeutics Inc for about US$9 billion, one of its largest deals ever, in a bid to expand in the increasingly competitive landscape of cutting-edge cancer treatments.
With Juno, Celgene would gain research into a novel class of therapies known as CAR-T, which use the body’s own immune system to fight cancer.
The Summit, New Jersey-based company is to pay US$87 a share in cash, a statement said yesterday.
That amount is 91 percent above Juno’s closing price on Jan. 16, the last trading day before the Wall Street Journal reported that the companies were in talks.
Celgene is doubling down on cancer drugs after suffering a major setback last year that sent its market value tumbling.
The company’s top-selling blood cancer drug, Revlimid, is expected to face competition in about four years, and the failure of a high-profile experimental candidate for Crohn’s disease in a late-stage trial in October last year heightened the pressure to find new drivers for long-term growth.
The value of the deal is net of cash and marketable securities held by Juno and of Juno shares already owned by Celgene. The transaction was approved by the companies’ boards of directors.
The purchase of Juno, shortly after Celgene agreed to buy Impact Biomedicines Inc for at least US$1.1 billion, is part of Celgene’s plan to help offset lost revenue from Revlimid once copycat drugs are on the market.
Before the takeover, Celgene and Juno already had ties. The two firms first struck a partnership in 2015 to research cancer treatments, and Celgene was Seattle-based Juno’s largest shareholder, with a stake of about 10 percent.
CAR-Ts are bespoke treatments that re-engineer the body’s own immune system cells to make them attack cancers, and, so far, they have shown the biggest promise in blood cancers, a disease area in which Celgene specializes.
The Juno deal gives Celgene an entry in a breakthrough field.
The first CAR-T to win approval from US regulators was a Novartis AG treatment in August last year, followed in October by Yescarta, a product Gilead Sciences Inc had just bought as part of its US$12 billion acquisition of Kite Pharma Inc.
Juno is among the furthest along in the development of treatments in the field, said Brad Loncar, an investor who founded an exchange-traded fund that tracks such therapies.
“Other than Kite, which is already spoken for, and Novartis, which is obviously a huge pharmaceutical company, there’s really no asset like Juno,” he said in an interview on Jan. 17. “This is going to be a trend that could majorly disrupt cancer treatment over a decade and this is just the very beginning of that.”
The transaction is expected to close in the first quarter.
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