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Cangene bought by U.S. rival for $236-million, latest Canadian biotech taken private

Workers at a Cangene facility.

Cangene

Another of Canada's small biotechnology companies is disappearing from the public markets, with the proposed acquisition of Winnipeg-based Cangene Corp. by a U.S. rival.

Emergent BioSolutions of Rockville, Maryland, has signed a deal to buy Cangene for about $236-million in cash. The $3.44 per share proposal, revealed late on Wednesday, pushed Cangene's stock price up by about 26 per cent in early trading on Thursday morning.

Cangene makes and sells several specialty plasma-based products that are used to counter the effects of anthrax and other toxins. It has manufacturing facilities in Winnipeg and Baltimore, and a plasma collection facility in Winnipeg.

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This is the latest in a spate of buyouts and take-overs among Canada's pharmaceutical and health care companies.

Last month, Toronto-based contract drug maker Patheon Inc. announced that it was being privatized by its majority shareholder, New York hedge fund JLL Partners. JLL partnered with giant Dutch health-care company Royal DSM to buy out Patheon's minority shareholders.

Also in November, specialty drug distributor Paladin Labs Inc. agreed to sell itself to Pennsylvania-based Endo Health Solutions Inc. in a deal valued at about $2-billion. And in October, medical lab testing company CML HealthCare Inc. was absorbed by rival LifeLabs Medical Laboratory Services in a $1.2-billion deal.

The Cangene takeover "is yet another example of just how attractively Canadian healthcare firms are currently viewed by peer firm acquirers," Euro Pacific Canada analyst Douglas Loe said in a research note.

Cangene president John Sedor said his company will benefit from becoming part of Emergent, which is "a leader in developing vaccines, as well as therapeutics for addressing critical diseases and disorders."

The acquisition will require regulatory approval and a two-thirds vote of Cangene shareholders at a meeting set for Feb. 12. But shareholders controlling 61 per cent of the company's shares have already vowed to tender to the Emergent offer.

The Apotex Group of Toronto holds about 61 per cent of Cangene shares, according to the company's latest proxy circular.

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About the Author
Reporter, Report on Business

Richard Blackwell has reported on Canadian business for more than three decades. At the Financial Post and the Globe and Mail he has covered technology, transportation, investing, banking, securities and media, among many other subjects. Currently, his focus is on green technology and the economy. More

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