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Business

Bayer makes bid for Norway's Algeta

German pharmaceutical group Bayer has made a preliminary offer to take over drug maker Algeta. The Norwegian firm is a rival of Bayer in the embattled cancer drugs market and known for its blockbuster therapy Xofigo.

Germany's Bayer had offered Algeta shareholders 336 kroner (40.7 euros) per share in a bid to acquire a majority of the company's 44 million shares, the Norwegian drug manufacturer said in a statement to the Oslo Stock Exchange on Tuesday.

Talks were still in an early phase, Algeta added, and it wasn't at all clear if they would lead to a takeover.

The announcement came after media reports about Bayer's interest in the profitable cancer drug maker, including a bid that would value the company at 1.8 billion euros ($2.4 billion).

Bayer also confirmed the offer on Tuesday, saying, however, that its bid was only preliminary for the time being.

Algeta specializes in radiotherapy treatments which use radium 223 and thorium 227 to destroy cancer cells. The company's blockbuster therapy is called Xofigo and treats prostate cancer. The product was approved by US authorities in May and is being distributed in cooperation with Bayer.

In the third quarter of 2013, Algeta made a loss of 98 million kroner on the back of sales to the tune of 60 million kroner. However, experts said the firm's new cancer therapy had the potential to boost annual sales to about 800 million euros in the next two years.

Following the announcement on Tuesday, shares in Algeta jumped about 30 percent at the Oslo Stock Exchange, reaching a high of about 344 kroner. Bayer's stock, however, slipped slightly to about 95 euros in trading in Frankfurt.

uhe/hc (Reuters, AFP, dpa)