Tags: pharma | bausch | ista | M&A

Ista Shares Jump after Bausch & Lomb Offer

Tuesday, 27 Mar 2012 11:56 AM

Shares of Ista Pharmaceuticals Inc. surged on Tuesday after eye-health company Bausch & Lomb said that it plans to buy the eye drug maker for about $500 million in cash.

The deal, announced after the close on Monday, gives Ista stockholders $9.10 per share. That is an 8.6 percent premium to Ista's Monday closing price of $8.38.

Bausch & Lomb, which makes nearly all of Ista's current U.S. products, is based in Rochester, N.Y.

The purchase price includes warrants and a small amount of Ista debt. The boards of both companies have approved the deal and expect it to close during the second quarter.

Ista's stock jumped 65 cents, or 7.8 percent, to $9.03 in Tuesday morning trading. Over the past year, the shares have traded between $2.88 and $11.39.

The news of the acquisition deal with privately held Bausch & Lomb comes after Valeant Pharmaceuticals International Inc. withdrew an approximately $360 million buyout offer for Ista in January. At the time, Valeant said that there was a lack of progress on the potential transaction. Ista had turned down a previous offer from the Canadian drug maker and adopted a "poison pill" shareholder rights plan during the time that Valeant pursued it.

RBC Capital analyst Adnan Butt, who had a $12 price target on the stock, wrote in a note that the "valuation seems reasonable although not as high as we had hoped for."

"We believe the Street was looking for a transaction in the high-single to low-double digits and as such could find the deal reasonable given that the risks associated with getting Prolensa approved and marketed," the analyst wrote in a note.

In other news, Ista announced on Tuesday that a patent has been issued for Prolensa.

Prolensa is a lower-concentration version of Bromday, which is a once-per-day eye drop for patients recovering from cataract surgery. In January Ista said that it expected to file for marketing approval for Prolensa during the first half of 2012. The company wants to market Prolensa as a treatment for postoperative inflammation and eye pain after cataract surgery.

Ista said the patent was issued to its licensor, Senju Pharmaceuticals Co. Ltd. The patent's expiration date was also extended from January 2024 to September 2025.

"This patent should provide protection for not only our new product candidate Prolensa, but also a potential bromfenac adjunct therapy for age-related macular degeneration," Ista President and CEO Vicente Anido Jr. said in a statement.

Anido said that Ista expects to file a new drug application for Prolensa with the Food & Drug Administration during the first half of the year, with a commercial launch following approval planned for early 2013.

Ista said it plans to discontinue Bromday sometime after the launch of Prolensa because Prolensa offers a lower concentration of bromfenac.

Ista, which is based in Irvine, Calif., also makes Bepreve, which is used to treat itching associated with allergic conjunctivitis.

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Tuesday, 27 Mar 2012 11:56 AM
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