Dr. Reddy's Laboratories to acquire OctoPlus for $36 million
Offer price represents a premium of 30 percent over most recent closing price and premium of 14 percent over OctoPlus' average closing price for the past 12 months
This price represents a premium of 30 percent overOctoPlus' most recent closing price at the time of the announcement and apremium of 36 percent, 28 percent and 14 percent, respectively, over OctoPlus'average closing price for the past three, six and 12 months.
The executive board and the supervisory board ofOctoPlus are said to both fully support the offer, and are recommending thatOctoPlus' shareholders sell their stock to Dr. Reddy's.
G.V. Prasad, CEO of Dr. Reddy's, says his companylooks forward to having a research and development base in the Leiden area andadds, "the acquisition gives us the ability to strengthen our technologicalcapabilities in the areas of drug delivery."
With the recent "value erosion" of Locteron, ahepatitis C drug OctoPlus was co-developing with Pittsboro, N.C.-based BiolexTherapeutics—but which never gained financing to push is to Phase III clinicaltesting status—OctoPlus' leaders felt that they needed to review a number ofalternative strategies for our company, finally concluding, according toOctoPlus, that the intended offer by Dr. Reddy's best serves the interest of thecompany's key stakeholders, "including our employees and shareholders."
Dr. Reddy's maintains that OctoPlus' developmentand manufacturing platform perfectly fits with its own marketing abilities,with a news release about the deal noting that "Dr. Reddy's is keen to furtherexpand into the fast growing fee-for-service business" and, to that extent, Dr.Reddy's "will retain OctoPlus as a specialist standalone entity to developspecialty generics for Dr. Reddy's. OctoPlus will become Dr. Reddy's center ofexcellence for complex injectables with retention of our highly skilled anddedicated professionals in our Leiden facility."