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Genzyme Corporation announced today that it has entered into an agreement to acquire the worldwide rights to Campath (alemtuzumab) from Bayer HealthCare, giving Genzyme primary responsibility for the development and commercialization of this potential break-though treatment for multiple sclerosis (MS).
Bayer will continue to fund a portion of alemtuzumab’s development in MS and will retain an option to co-promote the product in MS upon approval. In addition, Genzyme will assume sole responsibility for worldwide sales and marketing for Campath in B-cell chronic lymphocytic leukemia (CLL), where it is indicated for use as a single agent in first-line and previously-treated patients with this disease. Bayer will retain the right to develop and commercialise alemtuzumab in solid organ transplant indications.
The agreement further expands Genzyme’s hematologic oncology commercial presence beyond Campath through the addition of Fludara (fludarabine) and Leukine (sargramostim), and provides an opportunity to integrate members of Bayer’s experienced commercial team for all three drugs into Genzyme’s global operations. Genzyme will acquire a new, Seattle-area Leukine manufacturing facility for $75 to $100 million and hire the plant’s operating personnel following FDA plant approval, which is expected in 2010.
The transaction is accretive and already reflected in Genzyme’s 2009 revenue and non-GAAP earnings per share guidance. The deal is structured as an earn-out arrangement. Bayer will receive payments based on revenues (subject to an aggregate cap) and potential milestone payments if cumulative revenue targets are achieved. There are no upfront payments for the rights of these three drugs. The transaction would provide Genzyme approximately $185 million in oncology revenue in 2009 and up to $700 million in revenue over the next three years. Genzyme’s Oncology segment revenues in 2008 were $117 million. Today’s announcement supports the company’s goal of 20 percent compound average non-GAAP earnings growth from 2006 to 2011.