Abbott has acquired Kos Pharmaceuticals for $3.7 billion in cash to strengthen its position in the $20-billion cholesterol management market. The transaction is valued at $78 per share, a 56% premium over Kos’ closing price Friday of $50.09. "This acquisition expands Abbott's presence in the lipid management market and will provide several on-market and late-stage pipeline products," points out Miles D. White, chairman and CEO, Abbott.
Kos’ two lead products are Niaspan®, an extended-release niacin product that raises HDL levels and Advicor®, a Niaspan/lovastatin combination product that treats patients with multiple lipid disorders. A new Niaspan caplet formulation with a range of dosages is currently under review. Kos predicts that it will submit Simcor®, a fixed-dose combination of Niaspan and simvastatin (generic Zocor®) to treat lipid disorders, for review in the first half of 2007.
Abbott reports that these on-market cholesterol products and development opportunities will join its own lipid management portfolio, which includes on-market TriCor® and a TriCor/Crestor® development program with AstraZeneca.
Abbott expects the transaction to be $0.02 to $0.03 dilutive to ongoing earnings per share in 2007, neutral to accretive in 2008, and building to significant accretion thereafter. Following the closing, the transaction is expected to result in one-time charges, primarily for in-process R&D and integration expenses.
Kos opened Monday at $76.95, a 53.62% climb from its Friday close.