Celator soars on news of acquisition
Celator Pharmaceuticals in Ewing Township near Trenton has agreed to be acquired by Ireland-based Jazz Pharmaceuticals for about $1.5 billion in cash.
Celator Pharmaceuticals in Ewing Township near Trenton has agreed to be acquired by Ireland-based Jazz Pharmaceuticals for about $1.5 billion in cash.
Celator's shares surged more than 70 percent Tuesday after the announcement, to close at $30.08, up $12.55. The company has an experimental treatment for a rare blood cancer.
Celator announced in March positive results in a late-stage trial for Vyxeos, which showed "statistically significant" overall survival rates in patients with acute myeloid leukemia, a cancer of the blood and bone marrow.
Celator plans to submit a new drug application with the Food and Drug Administration in the third quarter.
"We think Jazz is doing the right thing by investing in future sales growth," analyst Louise Chen with Guggenheim Securities said in a client note.
Dublin-based Jazz Pharmaceuticals' top-selling narcolepsy medicine Xyrem, used to treat daytime sleepiness, faces potential competition from generic drug makers. Jazz has sued to try to block generic versions of Xyrem.
"We think Jazz could command good pricing for Vyxeos," Chen noted, "because Vyxeos can help patients move treatment to the outpatient setting and save hospitals money. And if approved, Vyxeos would be the first new significant treatment for AML in some time."
The FDA and the European Commission have granted Orphan Drug status to Vyxeos because it treats a rare disease or condition. The designation gives the manufacturer seven years of marketing exclusivity without competition from another product for the same disease.
"The planned combination of Jazz and Celator is highly complementary, as both companies are dedicated to bringing differentiated therapies to patients who have high unmet medical needs," Celator CEO Scott Jackson said. "We believe that Jazz Pharmaceuticals' clinical and commercial expertise in hematology/oncology and existing international infrastructure will help realize the value of Vyxeos."
Jazz CEO Bruce Cozadd agreed the acquisition was a good strategic fit.
"As Celator is currently preparing a regulatory submission in the U.S. for Vyxeos, this acquisition would add a new orphan product with the potential for short- and long-term revenue generation and expansion of our international commercial platform," Cozadd said.
Jazz agreed to pay $30.25 per share in cash for Celator, or about $1.5 billion, the companies said in a statement.
Jazz shares were down 0.35 percent, or 53 cents a share, to $151.56.
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