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Celgene Corporation, maker of thalidomide-based drugs for blood cancers, and Pharmion Corporation on Sunday jointly announced the signing of a $2.9 billion agreement under which Celgene will buy Pharmion, strengthening Celgene’s cancer drug portfolio and European distribution. Celgene will acquire all of the outstanding shares of Pharmion common stock for $72/share; $25 in cash and shares of Celgene as determined by an exchange ratio. Pharmion shareholders will end up with an approximate 6% stake in Celgene. The price is a 46% premium over Pharmion's Friday close of $49.28. The transaction is expected to be slightly dilutive to earnings in 2008 and accretive in 2009. Celgene is paying more than 10 times Pharmion's revenue of $256 million over the past 12 months. The acquisition furthers Celgene's strategy of becoming a major global player in blood-cancer drugs, since the deal brings together Revlimid, Thalomid and particularly Vidaza, a treatment for pre-leukemia blood-cell disorders -- three therapies expected to generate multiple global revenue streams over the next five years. "It's a great move for Celgene," said Michael King, an analyst with Rodman & Renshaw. "Vidaza has the potential to be a billion-dollar product."

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Source: Celgene Buys Pharmion, Hopes to Be Global Cancer Drug Leader