Celgene to Buy Biotech Drugmaker Receptos for $7.2 Billion

Celgene Corp. agreed to acquire Receptos Inc. for $7.2 billion, adding experimental treatments for inflammatory bowel disease and multiple sclerosis.

Celgene will pay $232 a share in cash, according to a statement Tuesday. The deal, expected to close in the third quarter, is a departure for Celgene, which has bet more on partnerships with smaller biotech companies than on outright takeovers.

The acquisition gives Celgene a drug, ozanimod, that will reach annual sales of $4 billion to $6 billion at their peak, Celgene Chief Executive Officer Bob Hugin said on a conference call. The treatment, Receptos’s leading product, is in final-stage studies for relapsing multiple sclerosis, with data expected in 2017.

The drug is also being tested for gastrointestinal inflammatory disorders -- a final-stage trial for ulcerative colitis is ongoing with data expected in 2018, and the company had also planned to test ozanimod in Crohn’s disease.

Receptos shares surged to $228.60 in late trading, while Celgene rose 5.1 percent to $129.11.

In the inflammation and immunology space, Celgene already sells Otezla for psoriasis and psoriatic arthritis. It also has an experimental Crohn’s drug, GED-0301, which is in a final-stage study. Celgene has seven more molecules in mid-stage development, according to Tuesday’s statement.

Full-Year Forecast

Celgene also reported preliminary second-quarter net product sales of $2.25 billion for the second quarter, a 22 percent increase over the prior year. Analysts had projected $2.24 billion, according to the average estimate of analysts compiled by Bloomberg. Preliminary earnings excluding one-time items increased to $1.23 a share from 90 cents. Analysts had estimated $1.13 a share.

Celgene raised its forecast for the year, estimating an adjusted earnings per share of $4.75 to $4.85. Previously, it had forecast adjusted earnings per share of $4.60 to $4.75. It maintained its guidance for 2015 product sales at $9 to $9.5 billion.

Receptos went public on May 8, 2013, at $14 a share, so the acquisition represents a more than 16-fold return in just over two years.

Bloomberg reported in April that Receptos was fielding takeover interest from potential buyers. The company had been seeking a partner to develop ozanimod, and those discussions, with as many as 10 companies, led to takeover interest, people familiar with the matter said at the time.

Celgene is paying a premium of 41 percent over Receptos’s closing price on March 31, the day before Bloomberg reported on the takeover interest.

Before it's here, it's on the Bloomberg Terminal.