By The Associated Press
2014-04-28 11:01 PM
A $25 billion bid to buy Forest Laboratories hasn't stopped the drugmaker from continuing to shop for deals of its own.
Forest said Monday that it will spend as much as $1.5 billion to buy Furiex Pharmaceuticals Inc. in a deal that will give it one of the broadest product lines for gastrointestinal disease treatments.
Shares of North Carolina-based Furiex soared in trading after the companies announced the deal.
Forest's latest acquisition bid comes more than two months after Ireland-based Actavis PLC said that it planned to buy Forest in a cash-and-stock deal valued at about $25 billion that is expected to close by the middle of the year.
Forest spokeswoman Mandy Kaufman said Monday that Actavis agreed to the Furiex acquisition bid and supports it.
For that deal, Forest plans to pay about $1.1 billion in cash, or $95 per share, for Furiex. It also will make additional payments of up to about $360 million depending on the development of eluxadoline, which treats the symptoms of a form of irritable bowel syndrome. Furiex announced initial results from late-stage testing on that drug in February and plans to submit it to regulators for approval by the end of this year's third quarter.
The treatment had received an FDA fast-track designation, which is designed to speed up the development and review of drugs that treat diseases with significant and unmet medical need.
Forest also plans to divest royalties Furiex receives on a couple of treatments to Royalty Pharma for about $415 million once the Furiex acquisition is completed. That would lower the price of the Furiex deal by about $315 million after taxes.
Earlier this year, Forest Laboratories Inc. also completed a $2.9 billion purchase of Aptalis, which makes gastrointestinal and cystic fibrosis treatments. Forest CEO Brent Saunders said Monday in a statement that the Furiex deal is a "natural extension" of his company's gastro-intestinal business following the Aptalis deal.
Forest has been hurt by generic competition to major drugs like the anxiety and depression treatment Lexapro. Saunders, the former CEO of optical products maker Bausch & Lomb Inc., took over last fall as Forest chief executive from the drugmaker's longtime leader Howard Solomon. Saunders had the backing of billionaire investor and Forest shareholder Carl Icahn.
Shares of Furiex jumped more than 28 percent, or $22.79, to $102.94 in Monday morning trading, while the Nasdaq exchange rose slightly. Forest shares, meanwhile, paralleled the broader market. They climbed 88 cents to $90.72.