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Genzyme completes acquisition of worldwide rights for multiple sclerosis drug Campath - update

Biopharmaceutical company Genzyme Corp. (GENZ) said Tuesday that it has completed the acquisition of the worldwide rights for Campath/MabCampath from German drug maker Bayer HealthCare (BAYRY.PK).

Campath is currently used for the treatment of B-Cell Chronic Lymphocytic Leukemia or CLL, and indicated for multiple sclerosis or MS.

According to the deal, Genzyme has the primary responsibility to develop and commercialize Campath, or alemtuzumab in MS. However, Bayer can exercise an option to globally co-promote the product for MS, upon approval.

Genzyme said it is conducting two rapidly progressing phase 3 studies of alemtuzumab in relapsing-remitting MS patients.

Under the deal, which was signed in March, Genzyme also acquired exclusive worldwide licenses for all the present and future indications of Fludara, a second-line therapy for CLL patients and Leukine, a growth factor used following induction chemotherapy in older adults with acute myelogenous leukemia.

Genzyme will also acquire a new, Seattle-area Leukine manufacturing facility for $75 million to $100 million and hire the plant's operating personnel following the 2010 anticipated FDA plant approval.

Genzyme noted that the agreement did not include any upfront payments for the rights of the drugs. However, Bayer will receive milestone payments and royalties of up to $650 million, depending on the sales achieved by Genzyme, as per the agreement. For alemtuzumab's new indication in MS, Bayer would receive royalties of 20% - 25% of revenues to a maximum of $1.25 billion, over 10 years.

Bayer will also receive possible substantial sales-based milestone payments, conditional on Genzyme not buying its milestone obligation in 2010 for an amount in the range of $625 million - $900 million.

GENZ is currently trading at $61.31, up $1.90 or 3.20%. BAYRY.PK is currently trading at $57.03, down 14 cents.

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