Celgene acquires Gloucester Pharmaceuticals

Celgene made another move to strengthen its expanding pipeline of cancer medicines Monday with the acquisition of Gloucester Pharmaceuticals, a private biotech company with a new drug for treating lymphoma.

 

The deal calls for Celgene, based in Summit, to pay $340 million in cash for the six-year-old Massachusetts-based biotech and to make additional payments of $300 million for future U.S. and international regulatory milestones.

 

"This acquisition makes sense on multiple fronts,’’ Wells Fargo Securities analyst Aaron Reames said in a research note. "We view it as a smart use of Celgene’s war chest of cash.’’

 

Gloucester, which is based in Cambridge, Mass., received federal regulatory approval last month to begin selling Istodax, a new type of drug for treating T-cell lymphoma.

 

Celgene has grown into one of the nation’s largest biotechnology companies through the development of two key cancer drugs and a recent series of acquisitions. Last year, the company acquired Pharmion to bolster its product pipeline as well as its ability to take new medicines to market.

 

Reames said one of the benefits of the acquisition is the timing of Isotodax's ramp up. Isotodax’s revenues would ramp up, he said, over the next two years to help offset the decline in sales of Vidaza, a drug Celgene gained from Pharmion, expected to occur in 2011 when the drug’s U.S. patent expires.