Celgene Corp. is nearing a deal to buy biotechnology company Impact Biomedicines for as much as $7 billion, according to people familiar with the matter.
The potential deal, which could be announced Monday, calls for Celgene to buy the privately held San Diego company in three stages, the people said. First there would be an upfront payment of about $1 billion, with the next two stages dependent on an approval of Impact's blood-disease drug from the Food and Drug Administration and successful commercialization, the people said.
Should the drug pan out as hoped, the deal could be worth about $7 billion in total.
Celgene, based in Summit, N.J., is one of the biggest U.S. biotechcompanies. It is known for its cancer-drug portfolio but has been trying to diversify beyond its top-selling product, multiple myeloma drug Revlimid, and move into immune disorders like the skin condition psoriasis.
Rivals have been seeking to sell generic versions of Revlimid, which accounted for $4 billion of Celgene's $9.5 billion in net product sales during the first nine months of 2017.
In Impact, Celgene would be paying up to acquire a startup established less than two years ago to revive a blood-disease drug known as fedratinib whose development had been halted by Sanofi SA in 2013 due to serious side effects. Impact's founders had developed and sold fedratinib to Sanofi, and then bought the rights back.
Last year the FDA agreed to let Impact resume testing of the drug despite the concerns about the side effects -- confusion and other neurological issues that result from a vitamin deficiency causing swelling in the brain. Impact has been developing fedratinib to treat bone-marrow disorders known as myelofibrosis and polycythemia vera that affect blood-cell production in tens of thousands of patients.
If approved, fedratinib would challenge a blood-disease drug from Incyte Corp. called Jakafi. Both drugs try to stop an enzyme that plays a key role in producing blood cells and driving the diseases.
Celgene has been under pressure from investors to do deals because new products like psoriasis drug Otezla haven't boosted sales as much as Wall Street expected. That has forced the company to lower its financial outlook and its highflying stock recently retreated sharply.
Celgene still has a market value of more than $80 billion.
Dana Mattioli contributed to this article.
Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com, Dana Cimilluca at firstname.lastname@example.org and Ben Dummett at email@example.com
(END) Dow Jones Newswires
January 07, 2018 16:50 ET (21:50 GMT)