Eisai to acquire MGI Pharma

Eisai Co. Ltd. and MGI Pharma Inc.recently unveiled a merger agreement

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TOKYO—Eisai Co. Ltd., a research-based human health care company that focuses on neurology, gastrointestinal disorders, oncology and critical care, and MGI Pharma Inc., an oncology and acute care focused biopharmaceutical company, recently unveiled a $3.9 billion merger agreement.

Eisai's acquistion of the company has been unanimously approved by the MGI Pharma board of directors. The acquisition is expected to occur through a tender offer followed by a cash merger. It is subject to customary closing conditions and regulatory approvals and is expected to be completed during the first quarter of 2008.

To effect the transaction, Eisai has established an acquisition subsidiary, Jaguar Acquisition Corp., which is wholly owned by Eisai Corp. of North America. Subsequent to the completion of the tender offer, Jaguar Acquisition Corp. will be merged into MGI Pharma and the combined entity will then become a wholly owned subsidiary of Eisai Corp. of North America.

Eisai intends to finance the acquisition through existing internal financial resources, as well as bank loan financing, and has secured commitment for the debt required to consummate the transaction.

According to Eisai, MGI Pharma's marketed and pipeline products in oncology and acute care, as well as its R&D and commercial capabilities, including field sales specialists, together with Eisai's existing oncology products, global infrastructure and R&D capabilities, will create a base for continued sales growth, pipeline enhancement and the opportunity for synergies.

Eisai said in a statement it expects the transaction will enable it to increase its presence in the U.S. market and strengthen its already-focused oncology business platform.
According to Lonnie Moulder, President and CEO of MGI Pharma, the company's board of directors, legal and financial advisors have been reviewing strategic alternatives for the company for several months.

"During that time, we have had the opportunity to share the MGI Pharma vision and business opportunity with many of the leading companies in the pharmaceutical and biotechnology industry," Moulder says. "This transaction represents the successful conclusion of that process. Our Board of Directors and the management team are extremely pleased to announce this transaction and the opportunity to continue to bring important therapies to patients."

Haruo Naito, president and CEO of Eisai, said the company  looks forward to working with MGI Pharma's team to address the unmet medical needs of patients throughout the world.
"Strategically, we expect this transaction to allow Eisai to significantly strengthen its oncology business and increase the likelihood of achieving our current strategic plan targets and our future revenue and earnings growth,"  says Haruo.

The acquisition is a continuation of Eisai's ongoing plan for growth, according to the company.
Under Eisai's "Dramatic Leap Plan" (DLP), its fifth midterm strategic plan, which spans from April 1, 2006 to March 31, 2012, Eisai has continued to achieve steady growth in all regions, including Japan, the United States, Europe and Asia, with a special focus on integrative oncology, where tremendous unmet medical needs exist.

Eisai has strengthened its oncology research and development and marketing infrastructure in the United States through the October 2006 acquisition of four oncology products and specialists' know-how from Ligand Pharmaceuticals and the April 2007 acquisition of Morphotek, Inc., a biopharmaceutical company specializing in the development of protein and antibody gene evolution technology. In addition, Eisai is building a new oncology facility for manufacturing and formulation R&D at its North Carolina site.

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