We Hardly Knew Ye, MGI

MGI has been on the block for some time, finally announcing it was seeking strategic alternatives about two weeks ago, and so it should not be a surprise that it was bought today by Eisai for $3.9 billion. But somehow, it still is. Japanese pharma doesn't typically engage in overseas acquisitions of this size.

The all-cash offer of $41/share is nearly a 39% premium to MGI's share price before it disclosed it was considering 'strategic options'. Not bad-- though not quite the almost-50% premium that Celgene paid for Pharmion a couple of weeks ago (a deal that, incidentally, creates a mightier competitor to MGI's MDS drug Dacogen.)

Still, this was undoubtedly a competitive situation, and Eisai probably beat some far larger suitors to the punch. But the mid-sized Japanese firm has been showing its dealmaking aggression for some time now as it seeks to internationalize and to secure growth beyond Aricept, whose US patent expires in 2010.

We have for some time questioned whether specialty pharma players of MGI's size and scope have an independent future. They seem tailor-made for acquisition by product-hungry Big Pharma companies who are simultaneously embracing the culture of specialist medicines. Whether this deal lights a fire under the rest--the Endos of the industry, for instance--we shall see.