Millenium Pharmaceuticals to acquire LeukoSite for 52.48 times revenue

Weekly Corporate Growth Report, Oct 25, 1999

The Deal: Millenium Pharmaceuticals Inc. has agreed to acquire LeukoSite Inc. for $635 million. The acquisition will provide Millenium with later stage drug development capabilities and a portfolio of therapeutic product candidates in clinical development and in late stage preclinical development. LeukoSite shareholders will receive 0.4296 shares of newly issued Millenium common stock for each LeukoSite share. The price rperesents a 49.0% premium for LeukoSite shareholders. On the news, LeukoSite rose $1.75, or 7.8%, to $24.125/share, while Millenium fell 3.125 cents to $83.46875/share.

Discussion: LeukoSite develops treatments for cancer and inflammatory, autoimmune, and viral diseases associated with malfunctioning leukocytes, or white blood cells. The company has a monoclonal antibody that has completed Phase I and II FDA clinical trials, and two other drugs are undergoing clinical trials in the U.K. Leukosite also has seven small-molecule drug research programs. It is developing drugs to fight transplant rejection and to aid in the treatment of leukemia, asthma, stroke, inflammatory bowel disease, arthritis, arteriosclerosis, and HIV.

Millennium develops treatments and diagnostics for conditions such as obesity, type II diabetes, asthma, cancer, and central nervous system disorders. Its approach includes searching for the genetic basis of a disease and stopping it at its roots. The acquisition will combine LeukoSite's antibody and small molecule products with Millenium's therapeutics to create a comprehensive portfolio of products in development.