Bristol-Myers Squibb has agreed to buy ZymoGenetics for $9.75 per share or about in cash. The transaction, with an aggregate purchase price of approximately $885 million.
ZymoGenetics, one of Seattle’s earliest and most visible biotechnology companies, has agreed to be acquired by Bristol-Myers Squibb for $9.75 per share, or about $885 million.
It’s unclear how many of ZymoGenetics’ 320 employees will lose their jobs, although spokeswoman Susan Specht acknowledged that “it is typical in a transaction like this that you would have the redundant administrative functions laid off.”
She said Bristol-Myers “has told us it doesn’t have any near-term plans to close the Seattle site until at least through 2011.”
The sale marks the latest acquisition of a major Seattle-area biotech by a pharmaceutical giant, including Amgen’s purchase of Immunex in 2002 and Eli Lilly’s acquisition of Icos in 2007.
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Both companies’ boards have approved the deal and ZymoGenetics will recommend shareholders sell their stock to Bristol-Myers in a tender offer slated to begin Thursday.
The price represents an 84 percent premium to ZymoGenetics’ closing price Tuesday of $5.30, before the deal was announced. The company’s stock hasn’t traded above $7 for more than two years.
New York-based Bristol-Myers was evidently most attracted by one product in the ZymoGenetics development pipeline, a possible treatment for hepatitis C infections called pegylated-interferon lambda.
The global pharmaceutical company already has made $200 million in progress payments to ZymoGenetics under a collaboration agreement on the drug inked in early 2009. The drug, known as PEG-interferon, is in Phase IIb clinical trials.
The acquisition, which requires federal antitrust clearance, would be the second time ZymoGenetics has been folded into a larger pharmaceutical company.
Founded in 1981, it was a public company until being acquired by Novo Nordisk in 1988. The Danish company later spun it off and ZymoGenetics went public again in 2002 at $12 a share.
In its latest incarnation as an independent company, ZymoGenetics struggled to develop a successful new product. Its only marketed product, Recothrom, a drug for controlling bleeding after surgery, has met lukewarm reception and reached quarterly sales of just $11.9 million last quarter.
“The acquisition of ZymoGenetics brings us full ownership of a promising investigational biologic that strengthens our very diversified hepatitis C portfolio,” said Bristol-Myers CEO Lamberto Andreotti. “In addition, ZymoGenetics brings proven capabilities with therapeutic proteins and revenue from a marketed specialty surgical biologic.”
Douglas Williams, the former ZymoGenetics research chief who became CEO in 2009, said combining with Bristol-Myers “will maximize the potential for our products and product candidates to make a meaningful difference for patients in need.”
Spokeswoman Specht said ZymoGenetics employees “are very surprised, and hopeful they will be retained.”
They greeted the news with “some sadness here, some hope — mixed feelings,” she said.