Jazz to Buy Gentium for $1 Billion for Rare-Disease Drugs

Jazz Pharmaceuticals Plc (JAZZ), the maker of the narcolepsy treatment Xyrem, said it will buy Gentium SpA (GENT), a rare-disease drug developer, in a deal valued at $1 billion.

Jazz, based in Dublin, will pay $57 a share in cash, a 2.4 percent premium over today’s closing price in New York for Gentium’s American depositary receipts, the companies said in a statement. Villa Guardia, Italy-based Gentium received approval in October from European regulators for Defitelio, a treatment for a disease that can occur after stem cell transplants.

Jazz has been seen as a takeover target for a foreign drugmaker that could use the transaction to lower its tax rate. The company moved its headquarters from Palo Alto, California, in January 2012 after closing its acquisition of closely held Azur Pharma Ltd., which had been based in Dublin. The deal for Gentium is expected to add immediately to Jazz’s earnings per share, the companies said.

“Incorporating Gentium into Jazz Pharmaceuticals is a strong strategic fit as Defitelio would diversify our development and commercial portfolio and complement our clinical experience,” Bruce Cozadd, Jazz’s chief executive officer, said in a statement announcing the deal.

The deal was approved by both companies’ boards, and is expected to close in the first quarter of next year, the companies said.

Jazz last year purchased EUSA Pharma Inc. for $650 million, giving it the leukemia drug Erwinaze. It’s biggest product, Xyrem, is expected to generate sales of $567 million this year, according to the average of eight analysts’ estimates compiled by Bloomberg.

Jazz gained less than 1 percent to $114.72 at the close today in New York before the deal was announced. It has more than doubled this year.

To contact the reporter on this story: Drew Armstrong in New York at darmstrong17@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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