Broadening its European business, Cephalon Inc. is buying Zeneus Holdings Ltd. in a $360 million deal that also will add marketed and investigational products to the company's burgeoning oncology pipeline.

Cephalon will acquire all the outstanding shares of Zeneus Holdings, the parent company of Zeneus Pharma Ltd., which markets 15 products in Europe, including Myocet (liposomal doxorubicin) for late-stage breast cancer, Targretin (bexarotene) for cutaneous T-cell lymphoma and Abelcet (amphotericin B lipid complex) for fungal infections. With the addition of those products to its portfolio, Cephalon expects its sales to grow by $100 million in 2006.

The acquisition "transforms Cephalon Europe," said Robert Grupp, vice president of corporate affairs for Frazer, Pa.-based Cephalon. Not only does it beef up the company's pipeline, especially in the area of oncology, but also it "builds a pan-European infrastructure across 18 countries, which is absolutely essential for our growth."

The company already has operations in the UK, France and Germany. By adding Zeneus as a wholly owned subsidiary, Cephalon gains entry into Spain and Italy, as well as several smaller European markets - such as Belgium, the Netherlands and Luxembourg - plus Scandinavia. About 245 Zeneus Pharma employees, primarily sales and marketing professionals, will stay on at Cephalon Europe.

Grupp called the acquisition "one more milestone" in the company's ongoing efforts to build a vertically integrated oncology business, initiated following promising results from its internal cancer compound, CEP-701, in Phase II development for acute myelogenous leukemia. Cephalon intends to report additional data at the upcoming American Society of Hematology meeting in Atlanta.

"The exciting results we saw with [CEP-701] earlier this year prompted us to begin building both an oncology pipeline and a marketing infrastructure," he told BioWorld Today.

With that goal in mind, Cephalon purchased San Diego-based Salmedix Inc. for about $160 million in May. That transaction brought Treanda (bendamustine hydrochloride), a nucleoside analogue with alkylating properties that is being evaluated in Phase II as a single agent in patients with non-Hodgkin's lymphoma who are refractory to Rituxan (rituximab, Genentech Inc.). (See BioWorld Today, May 16, 2005.)

A month later, Cephalon agreed to pay up to $170 million for Trisenox, a marketed cancer drug from Seattle-based Cell Therapeutics Inc. Trisenox (arsenic trioxide) was approved in the U.S. in 2000 and in Europe in 2002 as a second-line treatment for relapsed or refractory acute promyelocytic leukemia. Cephalon plans to seek approval for an expanded label to include first-line treatment. (See BioWorld Today, June 14, 2005.)

All the moves are aimed at "building a fully integrated company that we believe will be a platform for growth in the future," Grupp said.

And more deals could be coming down the road.

The company reported net income of $29.3 million, or 51 cents per share, for the third quarter. As of Sept. 30, Cephalon had a cash position of about $815.6 million.

While the Zeneus deal takes that figure down by $360 million, Grupp said, there still is "room for us to consider additional transactions."

Shares of Cephalon (NASDAQ:CEPH) closed at $50.51 Tuesday, down 38 cents.