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UPDATE 1-BioSante to buy Cell Genesys for $38 mln

Tue Jun 30, 2009 9:03am EDT

Stocks

   

* BioSante to buy Cell Genesys in all-stock deal

* Offer at 12 pct premium to Cell Genesys' Monday close

* Deal to be completed by Q3 or early Q4

* Combined co to mostly focus on BioSante's LibiGel

June 30 (Reuters) - BioSante Pharmaceuticals Inc (BPAX.O) said it agreed to buy Cell Genesys Inc CEGE.O, which had failed in its long quest to develop a prostate cancer drug, for about $38 million in an all-stock deal.

Under the deal, BioSante -- which develops products focused on sexual health -- will give 0.1615 of its common share for each Cell Genesys common share.

Based on BioSante's Monday close of $2.15, the deal values each Cell Genesys share at about 34.7 cents -- representing a 12 percent premium to Cell Genesys' Monday close of 31 cents.

Cell Genesys has been exploring strategic alternatives, including the sale and liquidation of the company, since last October, after its cancer product showed few chances of succeeding in a late-stage trial.

The deal is expected to be completed in the late third quarter or early fourth quarter of 2009. BioSante was advised by Oppenheimer & Co, while Cell Genesys was advised by Lazard.

The combined company will mainly focus on BioSante's lead product LibiGel, a testosterone gel intended to treat sexual dysfunction in women. LibiGel is currently in late-stage development, the companies said.

Shares of Cell Genesys were up 2 cents at 33 cents before the bell on Tuesday. (Reporting by Esha Dey in Bangalore; Editing by Himani Sarkar)



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