Auxilium Pharmaceuticals accepts Endo International’s takeover bid

Auxilium Pharmaceuticals Inc. says it accepts Endo International Plc’s acquisition offer. The Chesterbrook-based company says it has terminated its deal to take over QLT Inc., the Canadian maker of eye medications.

Endo International plc, which is based in Dublin, Ireland, offered $33.25 per share in cash and stock. It had previously proposed $28.10 per share, but this was turned down by Auxilium, which said it undervalued the true worth of the company.

Endo’s offer represents a 55% premium to Auxilium’s closing share price on September 16, 2014.

Auxilium’s share price jumped 11% to $33 on the news, while Endo’s fell 0.7% to $70.50.

The boards of directors of both Auxilium and Endo unanimously approved the transaction, which is valued at $2.6 billion, including debt repayment and assumption.

President and chief executive officer of Endo, Rajiv De Silva, said:

“We are pleased to have reached this agreement with Auxilium, which we believe will create value for both Endo and Auxilium shareholders, as well as for patients, customers and employees. By adding Auxilium’s complementary commercial portfolio, we believe this transaction is aligned with our strategy of pursuing accretive, value creating growth opportunities. We intend to leverage Auxilium’s leading presence in men’s health, as well as our R&D capabilities and financial resources to accelerate the growth of XIAFLEX® and Auxilium’s other products. We look forward to working with the Auxilium team to achieve the growth and synergy potential of this compelling strategic combination.”

Endo, whose portfolio includes Aveed, a testosterone replacement therapy for men, will now have Axilium’s medications to treat painful erections, plus treatment for a disease that undermines the patient’s ability to properly use his/her fingers.

Given the two companies’ complementary product portfolios, Endo foresees annual cost synergies of about $175 million. The company expects to see this synergy run-rate fully realized on an annual basis within a year of closing the Auxilium acquisition deal.

CEO and President of Auxilium said, Adrian Adams, said:

“We are proud of the work Auxilium has done to develop a portfolio of important products that are improving the lives of patients to create significant stockholder value. We believe this transaction is the culmination of those efforts. On behalf of the Auxilium Board and management team, I want to thank our dedicated employees, engaged partners and strategic advisors for their continued hard work and commitment, which have been instrumental in building Auxilium into the diversified specialty biopharmaceutical company it is today.”

Ando says it intends to finance the cash portion of the acquisition through a combination of existing cash-on-hand and committed debt financing from Citi.

The deal is expected to be completed in the first half of 2015 and is subject to the approval of Auxilium’s shareholders, as well as the approval of US regulators.


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Takeovers and acquisitions, are the same but not  mergers.