On the heels of making known its plan to buy ILEX Oncology Inc. for $1 billion, Genzyme Corp. has taken the lead-bidder position to buy the Physician Services unit of Impath Inc., which filed for bankruptcy in September and sold off another unit late last year.
Price tag on Genzyme's bid for the oncology testing part of Impath: $215 million. Genzyme's stock (NASDAQ:GENZ) closed Monday at $49.99, down 46 cents.
Impath's Physician Services would be folded into Genzyme Genetics, a business unit of Genzyme Corp. Mara Aspinall, president of Genzyme Genetics, noted that Genzyme Corp. has been moving forward in oncology for some time - it once had a Molecular Oncology division - and the Impath deal combined with the ILEX buyout "allows us to have the full spectrum" of weaponry in the cancer field.
The ILEX deal gives Genzyme a marketed product, Campath (alemtuzumab), approved about three years ago for B-cell chronic lymphocytic leukemia. Another ILEX drug, clofarabine, for relapsed or refractory acute childhood leukemia, is the subject of a rolling new drug application. Capabilities of the Impath unit will help further down the line in oncology.
Specifically, by buying New York-based Impath, Genzyme would gain an array of diagnostics in solid tumors and blood-based cancers, plus testing laboratories in New York City, Phoenix and Los Angeles and a team of board-certified anatomic and clinical pathologists. Genzyme said it intends to maintain operations at Impath's facilities and hire the unit's employees.
"As more and more therapeutics become more specific, it will be important to have diagnostics that are equally sophisticated," Aspinall told BioWorld Today, calling the ILEX and Impath deals "unique" and adding that the company "will continue to look for good opportunities."
The definitive Impath agreement, subject to bankruptcy-court approval, gives "stalking horse" status to Genzyme, which means Genzyme's first bid opens the door to other bidders in an auction process. Genzyme spokesman Dan Quinn said that, if the Impath unit ends up being sold to some other party, Genzyme gets a break-up fee of about $6.1 million, which includes reimbursement of expenses.
Less than a week ago, Genzyme said it was aiming to buy San Antonio-based ILEX at $26 per share, a premium of about 22 percent over ILEX's closing price on the last full trading day before the disclosure. Just last year, Genzyme paid about $600 million in the buyout of SangStat Medical Corp., of Fremont, Calif. (See BioWorld Today, Aug. 5, 2003, and March 1, 2004.)
The purchase of SangStat gave Genzyme the antithymocyte globulin Thymoglobulin, a polyclonal antibody sold in the U.S. as a suppressant of the immune system for acute rejection in renal transplant patients. The planned acquisition of the Impath unit, like the ILEX buyout, boosts Genzyme's presence in oncology.
Impath, along with its bankruptcy, has filed a lawsuit against James Weisberger, assistant chief medical officer and director of hematopathology at Bio-Reference Laboratories Inc., of Elmwood Park, N.J.
The action claims Weisberger has, among other things, misappropriated Impath trade secrets and unlawfully solicited former Impath workers to join Bio-Reference - which calls the Impath allegations "utterly baseless and totally without merit."
Quinn said the bankruptcy and legal goings-on between Impath and Bio-Reference are entirely separate and would have nothing to do with Genzyme's buyout of the Impath unit.
"We hope it will be completed in the first half of this year," he said.