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Pharmion's Euro Bet Pays Off

Celgene's $2.9 billion cash and stock offer for Pharmion proves that Pharmion's decision to tackle Europe--not a popular choice among US-based spec pharma--has paid off handsomely. Pharmion is Celgene's European partner on Thalomid; now Celgene gets 100% of the drug's economics right before launch. The deal may have come as a surprise to Wall Street, but it makes sense.

While speculation swirled around who would buy Biogen Idec Inc. and whether Genzyme Corp. would be next, out comes Celgene Corp. on November 19 with a $2.9 billion cash and stock offer for specialty pharma firm Pharmion Corp. , made up of 35% cash and 65% equity, at an almost-50% premium to the previous working day’s close. [See Deal] "We didn’t see this coming," admitted Citigroup analyst Yaron Werber, MD, on the conference call following the announcement.

Neither did we. But the deal makes sense. It’s another case of licenser buying licensee; Pharmion had in 2001 acquired ex-US rights to Celgene’s controversial yet successful thalidomide (Thalomid), marketed...

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