Fri, Mar 13, 2015 - Page 15 News List

Endo tops Valeant’s offer for fellow drugmaker Salix

AP, TRENTON, New Jersey

Specialty drugmaker Endo International PLC is trying to lure Salix Pharmaceuticals Ltd with an offer Endo said is worth 11 percent more than the US$10 billion Salix has agreed to accept from serial acquirer Valeant Pharmaceuticals International Inc.

Endo’s Wednesday offer is the latest in a burst of merger and acquisition activity in the biopharmaceutical industry that began last year.

Endo values its cash and stock offer at US$175 per Salix share, based on Tuesday’s closing price, with the offer including US$45 in cash and the rest in Endo common stock.

Valeant, which had offered US$158 per share last month, said in a statement that it is “firmly committed to our all-cash agreed transaction, which delivers immediate and certain value to Salix shareholders.”

Endo, based in Dublin, Ireland, on Wednesday said that it has submitted its proposal to the Salix board of directors. The company said the deal could close in the second quarter.

Salix said in a statement that its board would review Endo’s proposal and “pursue the course of action that it believes is in the best interests of the company’s stockholders.”

If Endo closes the deal, it would have to pay Valeant a breakup fee of US$356.4 million that is required under the Valeant-Salix deal announced on Feb. 22.

Salix, based in Raleigh, North Carolina, specializes in medicines for gastrointestinal disorders, including Pepcid and Zegerid for ulcers and gastroesophageal reflux, and Relistor for constipation caused by opioid drugs. It is developing two more drugs for opioid-induced constipation, one for rheumatoid arthritis and a drug called rifaximin for Crohn’s disease and preventing complications of liver cirrhosis. Rifaximin is currently under review for a third use, treating irritable bowel syndrome.

Last year, Salix reported total revenue of US$1.13 billion and a net loss of US$415 million.

Endo makes medical devices and brand-name and generic drugs, including drugs for pain, urologic disorders, an orthopedic disorder called Dupuytren’s contracture and a drug for an endocrine disorder that causes premature puberty. It is currently developing a drug to treat cellulite, a film that dissolves in the mouth for treating chronic pain and an orthopedic drug for a condition called frozen shoulder syndrome.

Endo, which has US headquarters in Malvern, Pennsylvania, reported revenue last year of US$2.88 billion and a net loss of US$721 million.

Canada-based Valeant, which specializes in dermatology, eye health and neurology, had revenue of US$8.3 billion and net income of US$912 million last year.

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