The acquisition spree in the health care space has reached its pinnacle over the past few quarters. Celgene Corporation CELG has entered into a definitive share purchase agreement to acquire the privately-held company, Quanticel Pharmaceuticals, Inc.
Terms of the Deal
Celgene will make an upfront payment of $100 million in cash to Quanticel apart from up to $385 million in contingent payments to be achieved upon the achievement of research, development and regulatory milestones related to Quanticel’s research and development platform.
According to the terms of the agreement, Celgene will gain full access to the lead programs at Quanticel and its proprietary platform for single-cell genomic analysis of human cancer. Several candidates in Quanticel’s pipeline are expected to enter clinical development in early 2016.
Celgene expects that the acquisition will not affect its adjusted diluted earnings guidance for 2015.
Our Take
Being a company focused on the development and commercialization of therapies for the treatment of cancer and inflammatory diseases through gene and protein regulation, Celgene may benefit by gaining access to Quanticel’s technology platform for single-cell genomic analysis of human cancer. Besides, with the addition of multiple candidates from Quanticel’s pipeline, Celgene’s pipeline may receive a significant boost.
Recent mergers in the healthcare industry include AbbVie Inc. ABBV and Pharmacyclics Inc. PCYC. AbbVie expects to close its acquisition of Pharmacyclics by the second quarter of 2015.
Celgene carries a Zacks Rank #3 (Hold). A better-ranked stock in the biotech sector is Biogen Inc. BIIB, carrying a Zacks Rank #1 (Strong Buy).
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