Jazz Pharma Pays $1.5 Billion for Celator

Jazz Pharmaceuticals PLC (NASDAQ: JAZZ) announced Tuesday morning that it has reached a definitive agreement to acquire Celator Pharmaceuticals Inc. (NASDAQ: CPXX) for $30.25 per share in cash. The deal reflects a premium of 72% to Celator’s closing price on Friday and totals about $1.5 billion.

Celator is preparing an application to the U.S. Food and Drug Administration for its Vyxeos treatment for a form of leukemia known as acute myeloid leukemia (AML), a new orphan drug.

Jazz expects to finance the transaction with a combination of cash on hand and borrowings under its senior secured credit facility. The deal is expected to close in the third quarter of this year.

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The deal is structured as a tender offer and second-step merger, and Jazz said that certain stockholders controlling about 18.4% of Celator’s stock have agreed to tender their shares in the offer.

Bruce Cozadd, chairman and CEO of Jazz, said:

Celator Pharmaceuticals is a strong strategic fit with Jazz Pharmaceuticals. VYXEOS will further diversify our product portfolio and is complementary to our clinical and commercial expertise in hematology/oncology. As Celator is currently preparing a regulatory submission in the U.S. for VYXEOS, this acquisition would add a new orphan product with the potential for short- and long-term revenue generation and expansion of our international commercial platform.

Celator CEO Scott Jackson added:

We believe that Jazz Pharmaceuticals’ clinical and commercial expertise in hematology/oncology and existing international infrastructure will help realize the value of VYXEOS as a treatment to patients with AML. After thoroughly evaluating our strategic options, our board of directors has unanimously determined that this all-cash transaction is in the best interest of our stockholders.

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Celator’s shares traded up more than 71% in Tuesday’s premarket to $30.03, after closing at $17.53 on Friday. The stock’s 52-week range is $1.12 to $18.18.

Jazz stock traded down about 1.4%, at $150.00 in a 52-week range of $108.50 to $194.73.