Genzyme will buy its cancer drug partner
As part of its push to become a bigger player in cancer drugs, Genzyme Corp. of Cambridge said yesterday it will buy out business partner Bioenvision Inc. of New York for $345 million , consolidating its ownership of a cancer treatment to which the two companies had been sharing rights.
Genzyme sells Clolar , an injection for children with leukemia, in the United States and Canada. Bioenvision has rights to sell the same drug elsewhere in the world. Yesterday's deal gives Genzyme full global rights to Clolar, which it plans to develop further for use in other cancers.
The deal is the latest investment in cancer treatment by Genzyme, one of the country's oldest and largest biotechnology companies. Over 25 years Gen zyme has grown to more than $16 billion in market value by making costly drugs for rare diseases, but recently has been trying to expand into other arenas, especially kidney disease and cancer treatments.
To build its arsenal of cancer drugs, Genzyme sank $1 billion into buying Ilex Oncology Inc. in 2004, acquiring the leukemia drug Campath and the American rights to Clolar. It also bought the cancer-testing business of Impath Inc. for $215 million. Last year Genzyme spent nearly $600 million to win a bidding war for AnorMed Inc. , a Canadian company that makes a still-experimental drug for bone-marrow transplants.
In the all-cash deal disclosed yesterday, Genzyme would pay $5.60 a share for Bioenvision. The deal has full approval of both companies' boards of directors, the companies said, and now requires 50 percent of stockholders to tender their shares. The companies expect the deal to close in early July.
In a research note yesterday, biotechnology stock analyst Phil Nadeau of Cowen & Co. said the purchase wasn't a surprise, since Genzyme executives had signaled at a May 16 investor conference that they would be interested in buying Bioenvision. The smaller company's stock has risen sharply since then, from a close of $3.35 on May 15 to $5.25 by the end of trading last Friday . Genzyme's offer amounts to about 7 percent above last Friday's price.
For biotechnology companies, cancer drugs have become an increasingly attractive target. Biogen Inc. of Cambridge, with a top-selling multiple sclerosis drug, entered the cancer market by merging with oncology drug developer Idec Pharmaceuticals Corp. in 2003. Last year Biogen Idec bought Conforma Therapeutics Corp. , which is also developing a cancer drug.
Across town, Millennium Pharmaceuticals Inc. has shed some of its massive research operation to focus more tightly on its one approved drug, a blood-cancer treatment called Velcade . Millennium tried to buy AnorMed last fall but was outbid by Genzyme.
Clolar is a relatively small seller, treating children with an uncommon blood cancer called acute lymphoblastic leukemia . It is approved only in children in whom cancer has recurred after at least two prior courses of treatment.
Originally developed at the Southern Research Institute , a nonprofit in Birmingham, Ala., the drug impedes leukemia cells from dividing and reduces their presence in the blood, although it is unclear if it prolongs patients' lives.
In Europe, Bioenvision sells the drug under a different name, Evoltra. Both companies are testing the drug in adults with other cancers. In a conference call with investors yesterday, Genzyme estimated it could ultimately sell up to $600 million a year.
Bioenvision also owns one other drug, Modrenal , a breast cancer treatment sold in the United Kingdom. A spokesman for Genzyme said the company had not yet decided whether to keep Modrenal or sell it. Bioenvision also has a pipeline of drug development projects in infectious diseases and autoimmune diseases.
Separately, Genzyme also said yesterday it would begin using cash to buy back up to $1.5 billion of its stock over the next three years. Genzyme shares rose 2 percent, gaining $1.30 to $62.56 .
Stephen Heuser can be reached at sheuser@globe.com. 
