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Six months after teaming up to win marketing approvals for the prostate cancer drug Xofigo (alpharadin or radium Ra 223 dichloride), Algeta said its board of directors approved acquisition of the company by Bayer, after the German pharma-and-chemical conglomerate raised its bid for the Norwegian biotech by $500 million, to about NOK 17.6 billion (about $2.9 billion) cash.

The deal, disclosed by Algeta yesterday, comes less than a month after Bayer moved to acquire the company through an initial $2.42 billion “preliminary acquisition proposal.” The deal would give Bayer sole control of Xofigo, an alpha-particle-emitting radiopharmaceutical delivered once a month via injection—and by extension, expand Bayer’s portfolio of cancer-fighting drugs and candidates.

Algeta has proven attractive to Bayer because of its pipeline of radiation therapy candidates. The Norwegian drug developer specializes in developing 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.

While Bayer would pay Algeta NOK 362 ($58.90) per share cash, the acquisition also has financial benefits for the conglomerate. The deal would free Bayer from having to pay Algeta a share of profits and royalties under their up-to-€560 million ($765.6 million) collaboration deal inked in 2009, through which they teamed up to develop Xofigo. At the time, the companies said Algeta had a profit-share arrangement giving it an option for up to 50% co-promotion with Bayer.

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.

Xofigo won marketing authorization from the European Union last month.

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