Tags: Endo | Auxilium | drugs | testosterone

Endo Will Buy Auxilium for $2.6 Billion to Gain Men's Drugs

Thursday, 09 Oct 2014 10:53 AM

Endo International Plc agreed to buy Auxilium Pharmaceuticals Inc. for about $2.6 billion to gain testosterone products.

Endo will pay $33.25 a share, and Auxilium holders will be able to choose cash, stock or a combination of the two, the companies said in a statement today. The price is 55 percent above Auxilium’s Sept. 16 value, when Endo announced that it wanted to buy the Chesterbrook, Pennsylvania-based drugmaker for $28.10 a share.

The purchase will add to Endo’s offerings of branded pharmaceuticals. Auxilium’s testosterone products include Testim, a topical gel, and Testopel, a pellet that is embedded under the skin. Last year they generated $271 million.

U.S. regulators have questioned the use of the testosterone drugs. An advisory panel to the Food and Drug Administration said last month that the medicines needed further study for their heart risk, especially as their use has widened.

Auxilium shares rose 10 percent to $32.84 while Endo fell 3 percent to $68.88 at 9:47 a.m. in New York.

Endo’s strategy is similar to that of Valeant Pharmaceuticals International Inc. Valeant has grown by buying smaller companies for their product lines. Valeant has acquired $4.4 billion worth of companies since the beginning of last year and uses its low tax rates to improve profit.

After making acquisitions, Endo then tries to cut research and development spending by focusing on lower-cost, lower-risk drugs, Endo Chief Executive Officer Rajiv De Silva said in a phone interview.

“We do believe we are more efficient that others,” De Silva said. “We believe in low-risk R&D.”

Auxilium also canceled a planned deal with QLT Inc., a Vancouver-based biotechnology company they had planned to buy for $345 million in stock. The deal would have moved Auxilium’s legal address to Canada, potentially lowering its tax rate.

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Endo International agreed to buy Auxilium Pharmaceuticals for about $2.6 billion to gain testosterone products. Endo will pay $33.25 a share, and Auxilium holders will be able to choose cash, stock or a combination of the two.
Endo, Auxilium, drugs, testosterone
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2014-53-09
Thursday, 09 Oct 2014 10:53 AM
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