After AnorMed Inc.'s board rejected an unsolicited $380 million takeover bid, Genzyme Corp. said it plans to go to AnorMed shareholders with a proposal to acquire the company.

Cambridge, Mass.-based Genzyme made a cash offer to purchase all outstanding shares of AnorMed for $8.55 each. Though the offer represents a 70 percent premium to AnorMed's Aug. 29 closing price of $5.02, it was "just too low" and "not acceptable to us," said Kenneth Galbraith, chairman and interim CEO of Vancouver, British Columbia-based AnorMed.

"We thought Genzyme was being too opportunistic and was trying to take advantage of the fact that capital markets for small-cap biotechs, including us, have been down considerably for the past two months," he told BioWorld Today, adding that Wednesday's market reaction "obviously indicates that Genzyme's bid was too low."

Shares of AnorMed (AMEX:AOM) skyrocketed 96.8 percent, or $4.87, to close at $9.90.

Galbraith said the firm hired Goldman, Sachs & Co. to pursue other strategic alternatives, and the board recommended adopting a shareholders' rights plan, which would "buy us some time," to consider other offers.

Genzyme's move was "uncharacteristically aggressive," he added, "but they've had a look at the assets months ago, and I think they wanted to act before anyone else had a chance."

The companies began discussions in October 2005 regarding Mozobil, a stem cell transplantation product that is in pivotal Phase III studies. In April, Genzyme offered a buyout, also valued at $8.55 per share, but AnorMed was in the midst of a proxy dispute at that time, and the proposal failed to go through.

"Now that the [proxy] issue has passed, we decided to renew our offer," said Genzyme spokesman Dan Quinn, who added that an official offer was expected to be filed within a week.

The acquisition interest largely hinges on Mozobil, which "we think has a lot of potential, and we think we're the right company to complete development and bring it to market," Quinn told BioWorld Today.

Mozobil is a stem cell mobilizer that is designed to work by blocking the cellular receptor CXCR4 and triggering the rapid movement of stem cells out of bone marrow and into circulating blood for use in a stem cell transplant. In addition to stem cell transplants, it's also being investigated as a chemosensitizer in leukemia patients.

Analyst Grant Zeng, of Zacks Investment Research Inc. in Chicago, told BioWorld Today he was surprised AnorMed's board rejected the offer and said an acquisition likely would be "a good deal for both," since AnorMed is "desperate for cash, and Genzyme can provide the necessary infrastructure."

Genzyme already established itself in the transplant area with Thymoglobulin (anti-thymocyte globulin, rabbit) for acute rejection of renal transplant, and in some countries outside the U.S. for induction therapy prior to solid organ or stem cell transplantation.

Genzyme's stock (NASDAQ:GENZ) closed at $66.28 Wednesday, down 39 cents.

In its press release, Genzyme said its bid was reflective of the "number of challenges" associated with Mozobil's development, citing a need to rebuild AnorMed's senior management team and difficulties in late-stage and commercial development, including an ability to obtain adequate funding. It also raised concerns that those challenges could result in "a significant risk that the commercialization of Mozobil will be delayed."

For the three months ending June 30, AnorMed reported a net loss of C$18.1 million (US$16.3 million), or C44 cents per share. The company ended the quarter with C$47 million in cash, and said it intended to investigate alternative funding sources in case of unfavorable market conditions, and even consider cutting its burn rate to get Mozobil to the market.

Once Genzyme has filed its offer, AnorMed will issue a circular to shareholders recommending against the acquisition.

"We've been very clear with our strategy over the last four or five months," Galbraith said. "We own all the rights to our products, and we're going to keep developing them on our own because we think that's the best way to build value for shareholders."

AnorMed has completed enrollment in a Phase III study of Mozobil in multiple myeloma patients and is completing enrollment in its Phase III study in non-Hodgkin's lymphoma patients. Pending positive results, the company anticipates filing a new drug application before 2007, with hopes to launch the product in 2008.

"We're right on track with those timelines," Galbraith said.

Behind Mozobil, AnorMed has AMD070, a small-molecule entry inhibitor in Phase I/II studies in HIV, and several preclinical compounds in development to target specific chemokine receptors in a variety of indications.