MGI Pharma hangs out 'for sale' sign

Nov 30, 2007 (Pioneer Press - McClatchy-Tribune Information Services via COMTEX) -- MOGN | charts | news | PowerRating -- Shares of Bloomington-based MGI Pharma advanced nearly 19 percent Thursday after the company said it is evaluating strategic alternatives -- language that often means a sale could be coming.

The biopharmaceutical company said in a released statement that its board of directors had authorized the strategic review, with Lehman Brothers acting as financial adviser.

"There can be no assurance that a strategic transaction will be pursued or consummated, and the company indicated that its strategy is yielding strong operating and financial performance," MGI Pharma said in the statement.

MGI Pharma markets oncology and acute care drugs including an injection medication called Aloxi, which combats nausea and vomiting for patients undergoing chemotherapy. The company also makes a drug called Dacogen, which is indicated for patients with a group of diseases that result from faulty blood-cell production.

In a research note earlier this month, analyst Jason Zhang of BMO Capital Markets wrote that Dacogen faced "more formidable" competition from a drug called Vidaza with the announcement the latter drug's manufacturer would be acquired by New Jersey-based Celgene.

The Associated Press reported Thursday that Robert W. Baird & Co. analyst Christopher Raymond remained "neutral" on MGI shares but believes the company may be an attractive target, according to a research note.

Raymond said Thursday's announcement, along with the recent disclosure of billionaire investor Carl Icahn's stake in the company, may provide a strong indication a takeover will occur in the near to intermediate term, the AP reported.

Icahn disclosed earlier this month he had taken a 0.75 percent stake in MGI Pharma during the third quarter.

Product sales for MGI Pharma increased to $110.8 million in the third quarter from sales of $95.5 billion during the year-ago quarter, the company reported in October. But sales of Aloxi -- MGI's top product -- were down during the quarter.

MGI Pharma shares closed Thursday at $35.10, up $5.55.

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