BioWorld International Correspondent

SYDNEY, Australia - Minority shareholders barely blocked an A$271 million (US$176.1 million) bid by Cephalon Inc. to purchase Sydney-based SIRTeX Medical Ltd.

Cephalon's offer of A$4.85 per share launched in February gained acceptances from those holding 88 percent of shares in SIRTeX, which has a liver cancer treatment the West Chester, Pa., company wanted to bring to market.

But the offer was conditional on reaching 90 percent, the level at which, under Australian law, the remaining shareholdings can be compulsorily acquired. At the close of the bid last week acceptances were just 2 percent short of the target, but without any prospect of that 2 percent being found.

The bid was supported by SIRTeX directors, including the executive director and chairman, Bruce Gray but one crucial shareholding, as it turned out, was 8.9 percent held by the Cancer Research Institute (CRI), based in Perth, Western Australia.

Gray is chairman of the institute but stood aside from the chairmanship while the bid was in progress. Other officials of CRI could not be contacted by BioWorld International, but Deputy Chairman Leonie Mirmikidis has been quoted as saying the bid was considered to be "too low."

Gray told BioWorld International that the idea of having Cephalon bidding "didn't work out," so now it is "business as usual."

That means the company will tackle on its own the problem of distributing its product into the U.S. He believed the company has sufficient capital on hand and does not intend to undertake any further financings.

SIRTeX has devised a treatment using very large biospheres, called microspheres, which contain radioactive particles. These spheres are delivered directly to the hepatic artery feeding the liver, through a catheter. They are trapped in the small blood vessels of the tumors and deliver their radiation dose directly to the tumors. (See BioWorld International, Feb. 19, 2003.)

Clinical trials have shown side effects, including fever, abdominal pain and nausea, but also have shown substantial greater survival times for patients treated using the spheres.

When Cephalon announced its bid in February the SIRTeX directors noted that the U.S. company already has a well-developed distribution network in the U.S. and Europe, with about 1,000 people in the U.S. and 700 in Europe. The friendly Cephalon bid was sparked when SIRTeX had talks with a number of U.S. companies about distributing its product.

Shareholders slashed the company share price when the result was announced from A$4.80 to A$4.25. At the close of business on Monday it was A$4.32.