Celgene, the US-based biotechnology company, is to buy rival Abraxis BioScience for $2.9bn in cash and stock.

The deal will broaden Celgene’s portfolio with Abraxis’ injectable cancer drug Abraxane, a treatment for breast cancer, that is also being studied for pancreatic, skin and lung cancers.

Celgene has developed drugs for blood cancers, including thalidomide, the drug that gained notoriety in the 1960s as a treatment for morning sickness in pregnant women but which caused birth defects in their babies.

The company was able to assure regulators that the drug’s use would be tightly controlled, even patenting a special management system to monitor access to thalidomide.

Its new offer values Los Angeles-based Abraxis at $71.93 share, a 17 per cent premium to its closing price on the Nasdaq on Tuesday.

Celgene will pay an additional $250m if Abraxane is approved for non-small cell lung cancer, $300m if it is approved for pancreatic cancer, with a further $100m if the latter is approved by April 2013.

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