Japanese drug maker
said Monday it will buy U.S.-based biotech firm
for $3.9 billion in cash, in an effort to bolster its cancer drug business.
MGI Pharma is being acquired for $41 a share, a 23% premium to its Friday closing price of $33.45. The Bloomington, Minn.-based biotech company announced Nov. 28 that it was seeking a buyer. The stock closed that day at $29.55.
MGI Pharma is a cancer-focused biotech firm with three marketed products -- Dacogen for the treatment of myelodysplastic syndrome, Gliadel wafers, used to treat brain tumors, and Aloxi, an anti-nausea medicine used by chemotherapy patients.
Eisai is Japan's fourth-largest drug maker, known best in the U.S. as co-marketers, along with
, of the top-selling Alzheimer's disease drug Aricept. Yet like many large pharmaceutical companies, Eisai is facing a revenue shortfall from looming patent expirations on key drugs, so it has been looking overseas for growth opportunities.
Eisai will fold MGI Pharma into its existing U.S.-based oncology business. Last year, the Japanese drug maker purchased four cancer drugs from
for $205 million. Earlier this year, it spent $325 million to buy drug maker
Eisai says the acquisition of MGI Pharma is expected to be completed in the first quarter of 2008. The transaction is expected to be accretive to cash earnings per share in the 2008 fiscal year and to GAAP earnings in 2009, the company stated.
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