Forest lab $1.46 billion acquisition of furiex pharmaceuticals

Source: Tencent finance and Economics said on Monday that it will purchase furiex pharmaceutical for up to $1.46 billion, including specific performance payments, to obtain the latter's promising irritable bowel syndrome drug and strengthen the existing gastrointestinal drug product line Forest lab said it would pay shareholders of furiex pharmaceuticals $95 per share in cash and offer up to $30 per share in future payment options for the probable value of new drug research and development Furiex shares surged 30% to $104.56 in early trading after the offer was announced It's the latest in a series of large-scale M & A deals in the health care sector that have been announced in billions of dollars over the past week A number of industry giants have recently launched acquisitions in the hope of acquiring a larger scale or strengthening the expertise in specific disease areas The forest lab, which is being acquired by atvis, said it expected that eluxadoline, an important drug in furiex pharmaceutical, would be a "perfect complement" to linzess, its gastrointestinal disease drug Eluxadoline is a diarrhea type irritable bowel syndrome drug under development, which can significantly alleviate the symptoms of the disease in two large-scale later trials; linzess has been approved for the treatment of constipation type irritable bowel syndrome Once both drugs are mastered, forest lab drugs will be able to cover the two most common symptoms of irritable bowel syndrome "Eluxadoline is almost the other side of linzess's coin, so we are the perfect owner of this asset," Brent Saunders, chief executive of forest labs, said in a conference call Furiex pharmaceutical is expected to file a listing application for elugadoline by the end of the third quarter of 2014 Forest lab plans to use existing cash to finance the acquisition, saying it will sell the franchise rights of diabetes drug agliptin and premature ejaculation drug priligy held by furiex pharmaceutical to royalty pharmaceutical in New York for about $415 million after the completion of the transaction "Our partnership with royalty pharmaceuticals will enable us to expand our existing gastrointestinal drug product line in the most capital efficient way, preserving the forest lab's capital allocation to the core areas of the company," Brent Sanders said Through a deal with royalty pharmaceuticals, the price of acquiring furiex pharmaceuticals could be reduced to $315 million after tax The payment of the contingent value of the transaction will depend on the approval of the Federal Food and Drug Administration on the drug listing application and the achievement of specific objectives Forest lab expects the transaction to be completed in the second or third quarter of 2014, which will not affect the merger and acquisition between atvis and the company In February 2014, generic drug maker atvis announced that it would acquire forest lab for $25 billion to acquire multiple brands of high margin Alzheimer's, high blood pressure and other disease treatment drugs