Millennium Pharma Soars on Takeda Bid

Takeda announced the offer late Wednesday, which works out to about $25 per share, or 53 percent above Millennium's closing price of $16.35 that day. The price also tops the 12-month target price of any analyst covering Millennium.

Shares of Millennium quickly rose to within the range of Takeda's offer price, surging nearly 50 percent to $24.42.

"We speculate that the all-cash nature, the quick closing period, and high break-up fee ($247 million) are all intended to stave off any third-party suitors," said Robert W. Baird analyst Christopher J. Raymond, in a note to investors.

Takeda, Japan's largest drug maker by sales, has specialized in treatments for diabetes and cardiovascular problems. Ranked 17th among global drug makers, it has struggled to stay competitive while attempting to head off a loss in revenue as its patents expire on key drugs.

It has recently been expanding ties with U.S. drug makers, especially those that focus on cancer treatments. In February it struck a deal with biotech giant Amgen Inc. for that company's Japanese unit and licensing rights for a number of cancer drugs in Asia.

Other deals for Takeda include rights to market Cell Genesys Inc.'s prostate cancer vaccine.

Millennium's key drug is the blood cancer treatment Velcade, which had sales of $83.5 million in the first quarter, up 42 percent from a year ago, above analysts' estimates. Velcade sales are expected to reach $345 million this year.

Goldman Sachs analyst May-Kin Ho expects Velcade sales to continue rising, saying the market is underestimating the cancer drug's international growth potential.

The drug is approved as a secondary treatment for the for multiple myeloma and the company is seeking approval for primary treatment. A Food and Drug Administration decision is expected by June 20.