Firm could pay another $267 million in milestones.
Endo Pharmaceuticals is willing to pay $370 million upfront and up to $267 million in milestones to acquire Indevus Pharmaceuticals. The firm believes that this transaction will complement its pain-management portfolio.
The takeover is initially valued at $4.5 per Indevus share. The firm closed trading yesterday at $3.10, making the price a 45% premium.
Endo also agreed to pay $3.00 per Indevus share based on the achievement of certain regulatory and sales milestones. This consists of up to $2.00 per share linked to Nebido a treatment being developed for male hypogonadism. Indevus plans to submit a complete response to the FDA in the first half of 2009.
The remaining $1.00 per share fee is payable upon approval of the octreotide implant, in Phase III testing for acromegaly, a chronic hormone disorder resulting from excessive production of growth hormone.
Endo does gain six marketed urology products, which brought in $77.8 million in sales last year. These include the Sanctura product line for overactive bladder, Vansta for advanced prostate cancer, Supprelin LA for central precocious puberty, and Delatestryl to treat male hypogonadism.
Endo expects the transaction to be dilutive to this year’s earnings and to become accretive in 2010. The firm reports that it will achieve up to $40 million in cost savings.
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