DOW JONES NEWSWIRES
Bristol-Myers Squibb Co. (BMY) has agreed to pay $9.75 a share in cash for biotechnology company ZymoGenetics Inc. (ZGEN), an 84% premium from the closing price Tuesday.
ZymoGenetics's shares shot up 83% to $9.70 after hours. The stock was down 17% this year as of the close. Bristol-Myers's shares closed at $26.61 and rose 7 cents after hours. That stock was up 5% this year as of the close.
The $836 million deal is expected to reduce Bristol-Myers' earnings by 3 cents a share this year and 7 cents a share next year.
Bristol-Myers plans to begin a cash tender offer on or about Thursday and the offer is expected to close about 30 days later. The acquisition agreement says ZymoGenetics will not solicit competing offers and Bristol-Myers will finance the acquisition from its existing cash resources.
Bristol-Myers Chief Executive Lamberto Andreotti said the acquisition gives the company "full ownership of a promising investigational biologic that strengthens our very diversified Hepatitis C portfolio." The two companies have collaborated on development of pegylated-interferon lambda since January 2009. The product is now in Phase II trials.
Andreotti also noted ZymoGenetics's "proven capabilities with therapeutic proteins and revenue from a marketed specialty surgical biologic."
Among ZymoGenetics's products are Recothrom, a drug for use in surgery to prevent blood clotting; IL-21 protein, which is in Phase II testing as a potential immunotherapy treatment for metastatic melanoma; and six biologic drug candidates for atopic dermatitis.
The company also is in six partnered programs with Merck KGaA (MKGAY, MRK.XE) affiliate EMD Serono Inc. and Novo Nordisk A/S (NVO, NOVO.B.KO).
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357; Kathy.Shwiff@dowjones.com
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