Pfizer is delving deeper into cancer research with a roughly $11.4 billion deal for Array BioPharma, a drug developer that has seen its shares soar since announcing positive clinical trial results earlier this spring.
Pfizer said on June 17 it will pay $48 per share in cash for Array, whose product portfolio includes a treatment combination used for advanced skin cancer that is being tested in other cancers as well.
The company said last month that its combination of the drugs Braftovi and Mektovi along with another treatment led to a significant improvement in overall survival in late-stage testing for some patients with colorectal cancer. The company plans to submit results from that study to U.S. regulators for approval later this year.
Array’s share price has jumped 41 percent since late May and more than doubled so far this year. Pfizer’s offer of $48 per share represents a premium of 62 percent to the stock’s closing price of $29.59 on Friday.
Shares of Boulder, Colorado-based Array BioPharma Inc. surged 60 percent before Monday’s opening bell.
New York-based Pfizer Inc., which makes the breast cancer drug Ibrance and the blood thinner Eliquis, said the boards of both companies have approved the deal. It will finance the deal with debt and cash, and it expects the transaction to add to earnings per share starting in 2022.
Pfizer, the biggest U.S. drugmaker by revenue, has had several drug approvals in the U.S. or elsewhere so far this year. But it also saw a heavily touted pain drug flop in late-stage clinical testing, placing the drug’s future in doubt.
Pfizer shares edged down 5 cents to $42.70 in premarket trading.
GE Sells Biopharma Unit for $21 Billion
General Electric is selling its biopharma business to Danaher Corp. for $21.4 billion as it continues to sell off chunks of a once-sprawling conglomerate.
The biopharma unit, part of GE Life Sciences, generated revenue of about $3 billion last year. Danaher said after tax benefits, the deal will have a price tag that is closer a $20 billion. The mostly-cash transaction is expected to close in the fourth quarter of this year.
Danaher, a medical technology company based in Washington, said GE’s biopharma segment will operate as a separate company within Danaher’s $6.5 billion Life Sciences division.
GE has shrunk considerably since becoming entangled in the financial crisis a decade ago and is seeking to divest even more of its businesses. Last fall, GE sold part of its Healthcare Equipment Finance business to TIAA Bank and agreed to sell its Current, powered by GE business—part of the company’s lighting business—to American Industrial Partners.
In October, the company slashed its quarterly dividend and announced it was restructuring its power business shortly after ousting CEO John Flannery after only about a year on the job. After being named as the new CEO, Larry Culp said GE needed to simplify its business structure even more.
GE said this month that it would downsize its world headquarters in Boston and return $87 million in incentives it received from Massachusetts for moving from Connecticut three years ago.
It also dropped plans to build a 12-story office tower on the city’s waterfront that was to be the centerpiece of its new global headquarters. It will sell that parcel of land along with two older, state-owned buildings that were being refurbished for the company.
Despite ongoing struggles in its power division, GE posted better-than-expected revenue last quarter on the strength of its other business segments.
Shares of GE jumped nearly 17 percent before the opening bell on Feb. 25. The company’s shares have risen about 34 percent since the beginning of the year, but are still down almost 30 percent from a year ago.
The Associated Press contributed to this report