Forest Labs to Buy Furiex Pharma in $1.5B Deal
Forest Laboratories Inc said it would buy Furiex Pharmaceuticals Inc for up to $1.46 billion including milestone payments to access Furiex's promising treatment for irritable bowel syndrome.
This is the latest in a series of healthcare deals and offers that have been structured to either gain scale or build up expertise in specific disease areas.
Forest, which itself is being acquired by Actavis Plc , said it expected Furiex's eluxadoline to be "very complementary" to its own bowel drug Linzess.
Eluxadoline, which is being developed for treating symptoms of diarrhea-predominant irritable bowel syndrome, significantly alleviated symptoms of the disease in two large late-stage trials in February.
Furiex is on track to submit a marketing application for eluxadoline by the end of the third quarter of 2014.
Forest will pay about $95 per share in cash to Furiex shareholders and up to $30 per share in a contingent value right, that would be dependent on the drug achieving certain designations given by the U.S. Food and Drug Administration following the drug's approval.
Furiex's shares were up 28 percent at $102.50 in premarket trading.
Forest said it expected the Furiex deal to close in the second or third quarter of 2014 and said it would not affect the timing of the Forest-Actavis acquisition.
Generic drugmaker Actavis said in February that it would buy Forest for about $25 billion to gain higher-margin, branded treatments for Alzheimer's, hypertension and other disorders.
Forest said it would sell Furiex's royalties on diabetes drug alogliptin and premature ejaculation treatment Priligy to New York-based Royalty Pharma for about $415 million upon successful completion of its acquisition of Furiex.
Furiex was advised by BofA Merrill Lynch, Credit Suisse, Kirkland & Ellis LLP and Wyrick Robbins Yates & Ponton LLP.
Covington & Burling LLP was Forest's legal counsel, while Royalty Pharma was advised by Goodwin Procter LLP.