In one of the largest sales of a San Diego County biotech company to date, Receptos has agreed to a $7.32 billion cash purchase by Celgene, a New Jersey-based cancer drug maker with an office in San Diego.
Celgene will gain a much-anticipated drug in clinical testing by Receptors for multiple sclerosis and ulcerative colitis. The drug, called ozanimod, is in a Phase 3 trial for relapsing multiple sclerosis.
Formerly called RPC1063, the drug's potential has helped propel Receptos into becoming a multibillion-dollar company since its initial public offering in 2013. Receptos shares have surged more than fivefold over the last year as ozanimod progressed in clinical testing.
The company agreed to pay $232 per share for Receptos, a 12 percent premium from Tuesday's closing price. The deal is expected to close this year.
Receptos and Celgene valued the deal at $7.2 billion excluding Receptos' cash on hand. That's larger than all but a few local biotech purchases, the biggest of which was the $13.6 billion purchase of Carlsbad's Life Technologies by Thermo Fisher Scientific in 2014.
Faheem Hasnain, Receptos' CEO, is highly regarded in the industry. Before Receptos, Hasnain led Facet Biotech, sold for $450 million cash to Abbott Laboratories in March 2010.
Facet developed Zenapax, an injectable drug for multiple sclerosis. The Receptos drug is taken orally.
Celgene, based in Summit, New Jersey, employs several hundred people in San Diego, said spokesman Greg Geissman. The workforce performs early stage research on identifying potential new drugs.
"We're very excited about this," Geissman said. "This is a great opportunity for us to continue to bolster this inflammation and immunology franchise."
Receptos has 68 employees, according to a profile on Yahoo Finance. Celgene is interested in keeping Receptos employees, but it's not clear how many will be retained, Geissman said.
Receptos reported about $2 billion in first-quarter sales of its drugs, which include the multiple myeloma treatments Revlimid and Pomalyst and breast and lung cancer drug Abraxane.
Revlimid, its top seller, is also used to treat severe anemia and mantle cell lymphoma.
The purchase of Receptos is part of a push to boost its sales of treatments for inflammatory and immune diseases. In 2014 Celgene launched its first drug in that category, the psoriasis and psoriatic arthritis treatment Otezla.
Receptos doesn't have any approved drugs on the market. The company expects results from late-stage trials of ozanimod in 2017 and 2018 and hopes to get the drug approved as a treatment for multiple sclerosis in 2018.
In addition to ulcerative colitis, Receptos is also studying ozanimod as a treatment for inflammatory bowel disease. The companies said they think its annual sales could reach $6 billion.
In extended trading, Receptos shares added 10 percent, or $21.17, to $228.35. The stock closed at $37.75 a year ago.
Celgene shares rose nearly 6 percent, or $7.07, to $129.92 in late trading. Last month Celgene agreed to invest about $1 billion in drug developer June Therapeutics Inc., mostly by buying stock. The companies plan to develop cancer and autoimmune disease treatments.