Cephalon to acquire Zeneus for $360 million

By Angela McDaniels

Seattle, Dec. 6 - Cephalon Inc. and Zeneus Holdings Ltd. said they have signed a definitive agreement under which Cephalon will acquire all of the outstanding share capital of Zeneus for roughly $360 million in cash.

Zeneus, parent company of Zeneus Pharma Ltd., will operate as a wholly owned subsidiary of Cephalon.

The transaction is expected to close no later than early in the first quarter of 2006.

"This agreement will significantly expand our product portfolio in Europe and is consistent with our strategy and recent transactions in the United States that create a platform from which we will grow our oncology business," said Frank Baldino, chairman and chief executive officer of Cephalon, in a company news release.

Cephalon expects the transaction to generate about $100 million in additional sales next year and to be neutral to earnings in 2006 and accretive to earnings after that.

The transaction will accelerate Cephalon's entry into the European oncology market with several commercialized products, including Myocet (liposomal doxorubicin), a cardio-protective chemotherapy agent used to treat late-stage breast cancer; Targretin (bexarotene), a treatment for cutaneous T-cell lymphoma and Abelcet (amphotericin B lipid complex), an anti-fungal treatment.

Zeneus has 12 other marketed products as well as several investigational compounds in early- or late-stage development, the companies said.

With this acquisition, Cephalon will add offices in Spain and Italy and bolster its existing presence in France, Germany and the United Kingdom, which represent Europe's five largest pharmaceutical markets.

Cephalon also will add offices in Benelux, Scandinavian and northern, central and eastern European countries when the transaction closes, the companies said.

"Zeneus will establish a broader, direct commercial presence for Cephalon in all five major European markets. In addition to the products, we will add pan-European capabilities in product registration, clinical research and development, sales and marketing," said Alain Aragues, president of Cephalon Europe, in the release.

Cephalon is a biopharmaceutical based in Frazer, Pa., that develops products to treat sleep and neurological disorders, cancer and pain.

Oxford, U.K.-based Zeneus Holdings is a privately held company backed by funds advised by Apax Partners, a private equity investment group. Zeneus Pharma develops specialist-marketed products, with a focus on oncology and critical care.

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