April 7, 2011

SUPERGEN Acquires ASTEX PHARMA and agrees to change Name to Astex

Supergen (SUPG) agreed to acquire privately held British biotech company Astex Therapeutics ltd and change name to Astex Pharmaceuticals. Eventually, Supergen will start trading under the symbol ASTX. The combined company website as of now is Astex-supergen

By acquiring Astex, Supergen is expanding its pipeline somewhat. this is a somewhat promising, however, whether this makes the combined entity a more lucrative take over candidate, this is hard to comment on.

SUPG shares fell to 2.85 range or nearly 12% from about 3.2 the day before. The pertinent point to note is that Supergen is paying $25 million cash and about 35% of outstanding stock. In addition, they would pay over $30 million dollars over the next 30 months. So it is interesting to see the market responds with a 12% decline when an impending 35% dilution of shares is concerned. However, the incoming pipeline also has substantial value so an accurate price determination is hard for one person to gage at this point.

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