NEW YORK, Jan 5 (Reuters) - Endo Pharmaceuticals Inc said
on Monday it will buy Indevus Pharmaceuticals Inc for about
$370 million, or $4.50 per share, in a deal that will enable
Endo to expand its product line beyond pain treatments.
The deal, which has been approved by the boards of both
companies, could include additional payments of about $267
million based on achievement of certain regulatory and sales
milestones involving Indevus drugs, the companies said.
The shares of Indevus, which has expertise in urology and
endocrinology, closed at $3.10 on Nasdaq prior to announcement
of the acquisition.
"The combined company will market nine products through
three specialty sales forces and have the capability to develop
innovative new therapies using a novel drug delivery
technology," Endo Chief Executive David Holveck said in a
statement.
Endo expects the deal to cut into its earnings in 2009, but
become accretive in 2010. It also expects to achieve $40
million in cost savings.
"The company has offered little in the way of guidance so
we're still assessing what the impact on the stock will be,"
said Caris & Co analyst David Moskowitz, who earlier in the day
cut his rating on Endo stock to "above average" from "buy",
saying the company had been dragging its feet on a deal,
leading to uncertainty.
"Initially (the deal) is a lot larger than we expected and
one of Endo's key assets is its cash position. Whether it is
truly dilutive to 2009 expectations is going to determine how
the stock trades."
Endo shares closed down 7.8 percent at $24.05 on Nasdaq.
Indevus currently sells treatments for overactive bladder,
prostate cancer and central precocious puberty. It is seeking
approval of drugs to treat hypogonadism and bladder cancer.
"It looks like the future growth of Indevus is highly
dependent upon their Nebido product for hypogonadism,"
Moskowitz added.
(Reporting by Bill Berkrot; Editing by Andre Grenon)
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