30% Owner of Lyphomed Offers $649-Million Buyout

A large Japanese pharmaceutical maker that already owns 30% of Lyphomed Inc.’s stock has offered $649 million for the rest of the drug company, Lyphomed announced Monday.

John N. Kapoor, Lyphomed’s chairman and founder, already has agreed to sell his 14% stake in the company to suitor Fujisawa Pharmaceuticals Co. if the Lyphomed board approves the deal, a company statement read.

“I don’t think it was unexpected, but we didn’t go out looking for a buyer,” Lyphomed spokeswoman Melissa Marsden said of Fujisawa’s offer. “Fujisawa has been a (stock) holder for a long time. We have had a friendly relationship with them and we have some projects under joint development.”

Fujisawa has owned 30% of Lyphomed, which is based in suburban Rosemont, since October, 1986, Marsden said. But an agreement with Lyphomed requires board approval if Fujisawa, based in Osaka, Japan, wants to buy more than 30.1% of the company’s stock before Jan. 11, 1991.

The $31-a-share offer was presented to Lyphomed over the weekend, Marsden said. The company already holds about 9 million of Lyphomed’s 29.9 million shares.

Lyphomed said it was consulting with financial advisers and considering the proposal.

Lyphomed stock surged $7.75 a share to close at $30.25 Monday in heavy trading on the New York Stock Exchange on news of the proposed acquisition.

Financial Problems

The company has gained national prominence for its sales of pentamidine, a drug used to treat AIDS-related pneumonia. Company sales soared from $4 million to $172 million between 1981 and 1987.

But quality-control violations discovered by the Food and Drug Administration at several Lyphomed plants soured the company’s financial performance, and Lyphomed lost $21.1 million in 1988.

Lyphomed has since shuffled top management, and Marsden said the proposed buyout was not connected with Lyphomed’s troubles.

For the first six months of 1989, Lyphomed posted a profit of $105,000 on revenue of $71.7 million.

Meanwhile, Lyphomed said Monday that the FDA had approved production at the company’s plant in Canovanas, Puerto Rico. Lyphomed plans to manufacture pentamidine, antibiotics and cardiovascular drugs there.

Tetsuro Nuki, chief executive of Fujisawa-SmithKline Corp., a wholly owned Philadelphia-based subsidiary of the Japanese company, said Fujisawa was not concerned about Lyphomed’s quality control.

Acceptance Expected

“Fujisawa believes Lyphomed has already cleared up that issue,” Nuki said. “We don’t see any problem at this point.”

Michael Harshbarger, an industry analyst at Hayes & Griffith, a Chicago firm that specializes in health-care investments, said Fujisawa was unlikely to tamper with Lyphomed’s recovery plan being led by Gary Nei, who joined the company as president and chief executive in May.

Harshbarger said that with the support of Kapoor, who shepherded the company through its success, it was unlikely that the Lyphomed board would reject the deal.

“It would be a total surprise to me if another bid emerged,” Harshbarger said. “It’s a friendly deal.”

If carried out, the buyout would be the latest in a series of drug company mergers this year. On July 27, Bristol-Myers Co. and Squibb Corp. announced that they would merge in an $11-billion stock-swap deal.

On July 26, shareholders of Philadelphia-based SmithKline Beckman Corp. approved a merger with Beecham Group PLC of Britain, creating a company with more than $6 billion in combined annual sales. A week earlier, Dow Chemical Co. said it would acquire a majority stake in Marion Laboratories Inc.