Pharmacia to Buy Sugen for $650 Million

Pharmacia & Upjohn Inc., the world’s No. 1 maker of human growth hormone, agreed to buy biotechnology company Sugen Inc. in a $650-million stock transaction that would boost Pharmacia’s development of cancer drugs. Pharmacia said it agreed to pay $31 worth of its stock for each share of Sugen. That price represents a 38% premium over South San Francisco-based Sugen’s closing stock price Tuesday of $22.50. The acquisition could reduce earnings per share by as much as 2% next year, Pharmacia said. The acquisition is part of Bridgewater, N.J.-based Pharmacia’s strategy to become a leader in the cancer field by gaining access to experimental drugs Sugen is developing. The transaction is to close in the third quarter, Pharmacia officials said. The deal was announced after markets closed. Pharmacia shares rose $1.38 to close at $54.69 on the New York Stock Exchange; Sugen shares fell 50 cents to close at $22.50 on Nasdaq.