Mesoblast deal inspires Teva to swoop on Cephalon

By Tim Dean
Thursday, 05 May, 2011

It's an acquisition frenzy as Teva Pharmaceutical Industries has made a US$6.2 billion bid for Cephalon in the wake of the latter's partnership with Australian regenerative medicine company Mesoblast.

The takeover bid trumps a similar bid made by Valeant Pharmaceuticals International, offering a 12 per cent premium on the Valeant's offering. Valeant has subsequently withdrawn its offer.

The Israel-based Teva is offering US$81.50 a share for Cephalon, valuing the company at US$6.8 billion.

Teva cited Cephalon's recent deal with Mesoblast as being one of the elements that inspired the takeover, considering the high-risk but high-reward technology to be very desirable.

Currently Teva's big breadwinner is its multiple sclerosis treatment Copaxone, which comes off patent in 2012. As such, it's on the hunt for the next generation of drugs and biologics, and considers Cephalon-Mesoblast to be a rich source of potential money earners in these areas.

Melbourne-based ChemGenex, which is working to bring its anti-chronic myeloid leukaemia drug, Omapro, to the market, has also been caught up in the takeover shenanigans.

Cephalon was mid-acquisition of ChemGenex when the Valeant and now Teva bids manifest, although ChemGenex insists that the takeover of Cephalon will not disrupt its own deal, which is progressing as planned.

Mesoblast (ASX:MSB) shares lifted another 6.2% in yesterday's trading, to $9.26, and is up nearly 19% over the past 30 days.

ChemGenex is steady at 69c, rising nearly 8% over the month.

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