Cephalon Offers To Buy Rest Of Australia's ChemGenex For $163 Million

   DOW JONES NEWSWIRES 
 

Cephalon Inc. (CEPH) offered to pay about $163 million to take over the rest of Australian biopharmaceutical company ChemGenex Pharmaceuticals Ltd. (CXS.AU, CXSPY).

ChemGenex's board recommended the bid, provided no superior offers emerge.

The bid comes one week after Cephalon, also a biopharmaceutical maker, agreed to buy a privately held cancer-treatment developer for $225 million in cash, with the possibility for paying an additional $300 million for regulatory and sales milestones.

Thursday, Cephalon said converted ChemGenex notes it held to shares representing a 28% stake in the company. It is offering A$0.70 cash for each ChemGenex share it doesn't now hold and A$0.02 for each ChemGenex option. The offer values all the stocks and options Cephalon doesn't own at about approximately A$159 million (US$163 million); it values all the company's shares and options at about A$225 million total.

Cephalon said the per-share offer price represents a 59% premium to ChemGenex stock's most recently traded price.

"The proposed transaction allows ChemGenex shareholders to realize cash proceeds at a significant premium to recent trading levels and adds an interesting late-stage opportunity to our portfolio," Cephalon Chief Executive Kevin Buchi said.

ChemGenex focuses on treatments for blood-related disorders and diseases. Its lead product candidate, Omapro, is intended to treat a cancer of white blood cells called chronic myeloid leukemia. The company recently finished late-stage trials of the drug and plans to file a new drug application with the U.S. Food and Drug Administration in the second half.

Cephalon has eight products on the U.S. market, selling specialty drugs for alertness, central-nervous-system disorders, pain management and cancer.

Recently, Cephalon has been benefiting from stronger sales of its products, which include treatments for alertness, central-nervous-system disorders, pain management and cancer. In the fourth quarter, the bottom line declined 3% but adjusted profit unexpectedly grew.

Shares in the Cephalon closed Thursday down 0.6% at $57.57 and weren't active after hours. The stock has fallen 18% in the last year.

-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; [e-mail]