Celgene goes for Gloucester

Companies to merge in $340 million cancer drug deal

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SUMMIT, N.J.—Seeking to advance its position as a developerof blood cancer therapies, Celgene Corp. announced Dec. 9 an agreement toacquire Gloucester Pharmaceuticals, a privately held biotech based inCambridge, Mass., for $340 million in cash plus $300 million in future U.S. andinternational regulatory milestone payments.
Pending regulatory approval, the acquisition is expected tobe complete in the first quarter of 2010. Celgene said the purchase will notimpact its non-GAAP diluted earnings for 2010 and will be accretive in2011. 
Gloucester Pharmaceuticals acquires clinical-stage oncologydrug candidates with the goal of advancing them through regulatory approval andcommercialization. For the last four years, Gloucester has been singularlyfocused on the development of its first drug, ISTODAX (romidepsin), a novelhistone deacetylase (HDAC) inhibitor that was approved in November 2009 by theU.S. Food and Drug Administration (FDA) for the treatment of cutaneous T-celllymphoma (CTCL) in patients who have received at least one prior systemictherapy.
Although the two companies had never collaborated beforethis deal, Celgene was attracted to Gloucester for several reasons, saysCelgene spokesman Greg Geissman.
"ISTODAX (romidepsin) is a strategic fit with our otherproducts and further diversifies and strengthens our premierhematology/oncology product mix," Geissman says. "There is a need for bettertreatment options for CTCL and peripheral T-cell lymphoma (PTCL), assuminglabel expansion. This deal enables Celgene to maximize the clinical andcommercial potential of ISTODAX through its existing infrastructure."
CTCL is a type of non-Hodgkin's lymphoma (NHL) caused by amutation of T-cells; most types of NHL are of T-cell origin. The malignantT-cells involve the skin, causing plaques, patches, erythroderma and/or tumorsand can involve other organs, including the blood, lymph nodes and viscera.According to the Cutaneous Lymphoma Foundation, this rare orphan disease has agreater frequency among men than women; the disease is more common after theage of 50.
ISTODAX has also received both orphan drug designation forthe treatment of non-Hodgkin's T-cell lymphomas, which includes CTCL and PTCL,and fast-track status in PTCL from the FDA. The European Agency for theEvaluation of Medicinal Products (EMEA) has granted orphan status designationfor ISTODAX for the treatment of both CTCL and PTCL. Accrual of the ISTODAXregistration SPA trial for peripheral T-cell lymphoma (PTCL) is expected to becomplete early next year. 
Geissman says the potential market for CTCL in the UnitedStates is approximately 16,000 to 20,000 patients, with the treatablepopulation for ISTODAX somewhere around 3,000 to 4,000 patients per year.
"For PTCL, there is a prevalence of about 40,000 to 60,000patients in the U.S., with a treatable population for ISTODAX at around 8,000to 10,000 per year," he adds.
Dr. Alan Colowick, CEO of Gloucester Pharmaceuticals, says Celgene's global position as a developer of innovative treatments forhematologic diseases "makes them ideally suited to bring the clinical benefitsof ISTODAX to patients with CTCL."
"I wouldn't say we necessarily set out to sell the company,but our strategy was to put ourselves in a position where we had options andcould control our own destiny," Colowick says. "We raised $29 million in thefall, thinking that it would give us the runway to take the drug to its initialapproval, which occurred in November. Once we got it approved and removed theregulatory hurdle, we realized selling would offer an interesting path for thecompany. It is a very nice chapter in our story, and we're absolutely thrilledbecause we think it presents the best outcome possible for patients as well asour shareholders."
The companies have not yet announced what the integrationwill mean for Gloucester's 15 employees.

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