Salix Pharmaceuticals (Nasdaq: SLXP) on Thursday closed on its acquisition of Santarus in a cash deal valued at $2.6 billion, the company announced after the close of the markets.
Raleigh-based Salix, a specialty pharmaceutical company focused on gastrointestinal treatments, acquired all of the outstanding common stock of Santarus at the price of $32 per share, a 37.9 premium over the company’s Thursday closing price of $23.20.
San Diego-based Santarus also has gastrointestinal products as well as endocrinology drugs. The acquisition had already been approved by the boards of directors of both companies.
“The acquisition of Santarus is a transformational event for Salix and an important milestone in our growth as the leading gastroenterology-focused specialty pharmaceutical company in the United States,” stated Carolyn Logan, chief executive officer of Salix. “The creation of a larger, stronger Salix reinforces our premier position in gastroenterology and creates the opportunity for us to expand our digestive disease expertise into other key specialties.”
Logan said the deal adds new products and resources to the company’s lineup.
“Beginning today, we are positioned to continue the growth of our business with an expanded portfolio of products and an expanded sales effort. Our product portfolio now offers 22 marketed products. And, going forward, our sales effort will benefit from the addition of a new 100-member gastrointestinal-focused sales force and the creation of a new, 160-member digestive disease specialty sales force. The new GI sales force will complement the efforts of our current 200-member GI sales force and provide greater reach and frequency for our products with gastroenterologists, hepatologists and colorectal surgeons. The new digestive disease specialty sales force will expand our specialty sales effort to target endocrinologists, infectious disease, pain specialists and high volume primary care physicians – prescribers formerly not accessed by our GI-focused sales effort. This expansion of our sales effort into these specialties represents an exciting area of growth for Salix. We believe these strategic additions to our sales effort should increase sales of our current products in the short term and begin to position the Company to maximize the sales of potential products over the longer term.”
Salix’s top selling drug is Xifaxan, a drug approved to treat treat traveler’s diarrhea as well as hepatic encephalopathy, a a brain disorder associated with severe liver disease. Xifaxan generated $165.9 million in third quarter revenue, a 20 percent increase compared to the same period in 2012.
Santarus’ top drug is Glumetza, a drug that used with diet and exercise improves glycemic control in adults with type 2 diabetes. Glumetza produced $45.6 in third quarter sales, a 6 percent year over year increase.
Salix is financing the deal with $800 million cash on hand and $1.95 billion in committed financing from Jefferies LLC. Jefferies LLC also has committed to provide an additional $150 million revolving credit facility.
