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November 7, 2013

Salix to buy Santarus for $2.6bn

Salix Pharmaceuticals has entered into a merger agreement to acquire Santarus for $2.6bn as part of its strategic plans to boost its portfolio of drugs with a complementary set of products.

By admin-demo

Salix Pharmaceuticals has entered into a merger agreement to acquire Santarus for $2.6bn as part of its strategic plans to boost its portfolio of drugs with a complementary set of products.

The boards of both companies have approved the proposed transaction, which is expected to be closed in the first quarter of 2014.

Salix president and chief executive officer Carolyn Logan said: "We are very pleased to be able to merge our sales forces, combine two complementary product portfolios, expand our pipeline, diversify revenue, access health care providers in primary care, add a significant number of health care prescribers to our called-on universe and to better position Salix for success in the present as well as the future."

The acquisition will provide Salix with an experienced specialty sales force to significantly expand gastrointestinal product sales, as well as strengthen its position as the largest US gastroenterology-focused specialty pharmaceutical firm.

"The acquisition will provide Salix with an experienced specialty sales force to significantly expand gastrointestinal product sales."

Santarus president and chief executive officer Gerald Proehl added: "We believe the timing is right for this strategic combination with Salix, a highly respected company that is uniquely positioned to expand the commercialisation of Santarus’s marketed products and to continue to advance the development of our pipeline products."

Santarus sells type 2 diabetes drugs Glumetza and Cycloset, heartburn drug Zegerid, Uceris for moderate ulcerative colitis and Fenoglide, an adjunct to diet to reduce high cholesterol.

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Following the acquisition, the combined company will have a portfolio of 22 marketed products, including Xifaxan, Uceris, Glumetza, Apriso, Zegerid, Moviprep, Relistor, Solesta, Fulyzaq, Cycloset and Fenoglide.

As part of the merger agreement, Salix plans to pay for the deal with about $800m cash on hand and $1.95bn in committed financing from Jefferies Finance, which also agreed to provide an additional $150m revolving credit facility.

In addition to the merger, Salix and Santarus have entered into an agreement with Santarus’ licensor Cosmo Technologies, restructuring certain aspects of its relationship with Cosmo.

Under the deal, Salix will be returning rifamycin SV MMX to Cosmo Technologies effective with the closing of acquisition of Santarus.

Salix hopes the acquisition will help expand its GI products into primary care to capture significant product sales currently not accessed by the Salix sales effort.

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