Biotech Values

[steveporsche]

Endo to buy Indevus for $370 million

Endo Pharma will pay up to $7.50 per share for urology and hormone drug maker Indevus

Monday January 5, 2009, 5:26 pm EST

NEW YORK (AP) -- Endo Pharmaceutical Holdings Inc. said Monday it will buy Indevus Pharmaceuticals Inc. for $370 million upfront, or $4.50 per share, acquiring Invedus' urology and hormone drug candidates in the process.

The upfront price represents a premium of 45.2 percent to Indevus' Monday closing price of $3.08. The boards of both companies approved the deal. Endo plans to launch a tender offer for Invedus shares within the next five days. That offer will remain open for 45 days.

Endo could pay an additional $267 million, or $3 per share, if Indevus' long-acting testosterone drug candidate Nebido and its acromegaly treatment candidate ocreotide reach development and sales milestones in the next few years.

Indevus shares rose $2.28, or 73.6 percent, to $5.38 in aftermarket trading. Endo shares slipped 38 cents to $23.67, from $24.05.

Chadds Ford, Pa.-based Endo said the deal will decrease its profit in 2009 and add to its profit in 2010, although it did not detail the effects.

Invedus' is developing Nebido to treat hypogonadism, a hormonal condition that interferes with the functioning of the testes. The ocreotide implant is designed to treat acromegaly, a hormone disorder that can make the feet, hands, nose and mouth grow to unusually large sizes.

The Lexington, Mass., company plans to send the Food and Drug Administration new data on Nebido in the first half of 2009, as it seeks approval to market the drug in the U.S.

Endo will pay up to $2 per share if Nebido is approved without restrictions in the next three years, or if its approval is restricted but the drug reaches a sales target within five years. It will pay up to $1 per share if the FDA approves the ocreotide implant to treat acromegaly or carcinoid tumors, which usually occur in the gastrointestinal tract, in the next four years.

Indevus also makes the overactive-bladder treatments Sanctura, which was licensed to Allergan Inc., and Sanctura XR. Other products include the drug Supprelin LA to treat early puberty.

Indevus is also hoping to relaunch its bladder-cancer drug Valstar in 2009. It was withdrawn from the market in 2002 after one of its inactive ingredients was determined to be unstable, and the company is waiting for inspections of the third-party manufacturer of the drug to be completed.

Endo sells pain drugs including the Lidoderm patch, Opana and Opana extended-release. The company reported $913.2 million in revenue through the first three quarters of 2008, while Indevus posted $77.8 million in the fiscal year ended Sept. 30, 2008.

In the last 12 months, Indevus stock has traded between $1.19 and $6.95.

http://finance.yahoo.com/news/Endo-to-buy-Indevus-for-370-apf-13971100.html