Jazz Pharmaceuticals buying Celator for $1.5B

Jazz Pharmaceuticals announced on Tuesday that it is acquiring leukemia drug maker Celator Pharmaceuticals for $1.5 billion.

The $30.25-a-share offer represented a hefty premium over New Jersey-based Celator's (CPXX) Friday close of $17.53, and the company's stock soared 71% to $29.99 in early trading. Dublin-based Jazz's (JAZZ) stock dropped less than 1% to $151.39 in New York trading.

Celator's lead drug, Vyxeos, is currently in development and offers the potential for longer life to older patients suffering from a blood cancer known as acute myeloid leukemia (AML). The company is hoping to submit a new drug application for Vyxeos to the Food and Drug Administration by the end of the third quarter of this year. Assuming FDA approval, Celator said earlier this month that it expects the drug to come out in the third quarter of 2017.

In March the company announced positive results of a Phase 3 test for Vyxeos which sent the company's stock flying more than 400%.

"Celator Pharmaceuticals is a strong strategic fit with Jazz Pharmaceuticals. Vyxeos will further diversify our product portfolio and is complementary to our clinical and commercial expertise in hematology/oncology," said Bruce Cozadd, chairman and CEO of Jazz in a statement.  "As Celator is currently preparing a regulatory submission in the U.S. for VYXEOS, this acquisition would add a new orphan product with the potential for short- and long-term revenue generation and expansion of our international commercial platform."

According to the US government's cancer website, 19,950 new cases of AML will be diagnosed this year, 1.2% of all new cancer cases. The government estimates 10,430 people will die from the disease in 2016.

"We believe that Jazz Pharmaceuticals' clinical and commercial expertise in hematology/oncology and existing international infrastructure will help realize the value of Vyxeos as a treatment to patients with AML," added Scott Jackson, CEO of Celator Pharmaceuticals, in the statement announcing the deal.

Jazz expects to complete the Celator purchase in the third quarter of 2016.

Follow Eli Blumenthal on Twitter @eliblumenthal