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Genzyme Breaks a Biotech Taboo: The Hostile Bid For AnorMED

Executive Summary

In late August, Genzyme launched a hostile bid for AnorMED, a Canadian biotech with an unpartnered stem cell mobilizer called MOZOBIL currently in Phase III clinical trials. When Millennium Pharmaceuticals Inc. jumped in with a higher offer, it set off a bidding war that has been dubbed "The battle of Boston". Ultimately, Genzyme prevailed, but in deciding to go directly to AnorMED's shareholders with its bid, that company's management broke one of the last taboos of biotech M&A. The move illustrates business development execs' desperate need to nab suitable assets that might help cure pipeline woes. Indeed, it appears unencumbered late stage assets are now so rare that their value may exceed estimates ascribed by the market; and this is true even if the people working on that asset are lost, as typically occurs following unsolicited offers.

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Millennium Prospers Under Takeda--But Will Takeda Get Full Value?

In losing its autonomy as an independently traded entity, Millennium has finally gained the freedom to become a larger player in the oncology space. One year after being acquired by Takeda, the biotech must no longer demonstrate to Wall Street regular quarterly earnings from Velcade, its only product, while trying to fund additional trials and build its pipeline. The success of this new business model fashioned by Takeda for its acquisition is still an open question, but it could provide a winning formula for Big Pharma companies in dire need of rejuvenated pipelines.

Millennium Prospers Under Takeda--But Will Takeda Get Full Value?

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