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Drug giant Bayer offers to pay $2.9b for Algeta, a firm with a US office in Cambridge

Algeta ASA, a Norwegian company whose US commercial, marketing, medical affairs, and general operations are based in Cambridge, said that its board of directors is unanimously recommending a voluntary cash offer from German pharmaceutical giant Bayer AG to buy Algeta for $2.9 billion.

In May, Algeta won Food and Drug Administration approval to sell a new treatment for prostate cancer that has spread to the bones. The drug is called Xofigo.

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Algeta has been comarketing Xofigo to US urologists and oncologists with Bayer, which filed the new drug application with the FDA as well as with European regulators. Bayer has exclusive rights to market Xofigo outside the United States. The drug was developed in Oslo by Algeta, which struck a partnership with Bayer.

Algeta has 83 employees in the US. Roughly a quarter of that number is based in Cambridge.

The offer price represents a 37 percent premium to Algeta’s closing share price on Nov. 25, and a 48 percent premium to the three-month volume weighted average stock price on Nov. 25, the last trading day before the announcement of an earlier proposal from Bayer. That was a $2.4 billion proposal.

In a statement included Algeta’s Thursday press release, Algeta’s chairman Stein Holst Annexstad said: “The board of directors of Algeta has undertaken a careful review of the terms and conditions of the offer. We believe the offer recognizes the strategic value of Algeta and delivers a considerable cash premium to our shareholders. Having worked with Bayer since 2009, the board of directors is convinced of Bayer’s commitment to establishing Xofigo globally, and maximizing its blockbuster potential. We are also pleased that Bayer intends to further invest in the potential of Algeta’s Targeted Thorium Conjugate research platform.”

Chris Reidy can be reached at reidy@globe.com.
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