Algeta said today it received a “preliminary acquisition proposal” from Bayer worth NOK 14.8 billion ($2.42 billion), as the German pharma and chemical conglomerate seeks to acquire its partner in developing the recently approved prostate cancer drug Xofigo (also known as radium Ra 223 dichloride or alpharadin).

“There is no certainty that this preliminary acquisition proposal will lead to a transaction or as to the terms of any such transaction,” Algeta said in a 138-word statement. “Discussions are at an early stage, and further announcements may be made, as appropriate, in due course.”

Algeta disclosed the offer following a published report in the German newspaper Frankfurter Rundschau.

A Bayer takeover of Algeta would free the pharma giant from having to pay its partner a share of profits and royalties under their up-to-€560 million ($757.6 million) collaboration deal inked in 2009, through which they teamed up to develop Xofigo, an alpha-particle-emitting radiopharmaceutical delivered once a month via injection. At the time, the companies announced that Algeta had an option for up to 50% co-promotion with Bayer in the United States under a profit-share arrangement.

Xofigo is indicated for men with castration-resistant prostate cancer (CRPC), symptomatic bone metastases, and no known visceral metastatic disease. The FDA approved Xofigo in June under its priority-review program, allowing decisions up to six months faster on new drugs that appear to provide safe and effective treatment when no other satisfactory treatment exists, or offer a significant improvement over existing treatments.

The agency granted its approval based on the results of a clinical trial of 809 men with castration-resistant prostate cancer that had spread to their bones, but not to other organs. Men who received Xofigo lived an average of 14 months compared to just over 11 months for men receiving placebo.

Earlier this month, Xofigo won marketing authorization from the European Union.

Bayer is counting on Xofigo as one of five drug launches that have a combined sales potential of more than €5.5 billion ($7.4 billion). An average of seven analysts’ estimates cited by Bloomberg has Xofigo racking up near-blockbuster annual sales of €494 million ($668 million). During the third quarter, according to Bayer, Zofigo generated €12 million (about $17 million) in U.S. sales.

To Bayer, Algeta is also attractive because of its pipeline of radiation therapy candidates; the Norwegian drug developer specializes in developing new anticancer therapeutics based on alpha-particle-emitting radionuclides, whose short range (typically less than 0.1 mm) and high linear energy transfer enables them to be used in molecular targeted radiation of tumors. When selectively delivered to tumor tissue, the alpha particles kill the tumor cells, leaving surrounding normal tissues unharmed.

At NOK 336 (about $55) per share—NOK 30 ($4.91) more than had been speculated in press reports, Algeta pointedly noted in its statement—Bayer’s offer represents a 27% premium over its prospective takeover target’s share price on Monday, when it closed at NOK 264.6 ($43.22).

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