Salix Pharmaceuticals to acquire Santarus

Company aims to solidifies its position as the largest U.S. gastroenterology-focused specialty pharmaceutical company

Lloyd Dunlap
RALEIGH, NCIn a move designed to solidify its position in gastroenterology, expand its sale force and increase its commercial presense in hepatology and colorectal surgery, Salix Pharmaceuticals, Ltd. will enter into a merger with Santarus, Inc. Under the terms of the agreement Salix will acquire all of the outstanding common stock of Santarus for $32.00 per share in cash (without interest).
 
The all-cash transaction values Santarus at approximately $2.6 billion. The $32.00 per share price represents an approximately 36 percent premium over Santarus’ November 6, 2013 closing price of $23.53 per share and an approximately 39 percent premium over Santarus’ average closing stock price for the prior 30-trading day period. The proposed transaction has been unanimously approved by the boards of directors of both companies. The transaction is expected to close in the first quarter of 2014.
 
Salix President and Chief Executive Officer Carolyn Logan, stated, “We are extremely pleased with the Santarus acquisition, which is transformative for Salix both commercially and financially, fulfilling many of our strategic needs while providing immediate and significant accretion in 2014 and beyond. We are very pleased to be able to merge our sales forces, combine two complementary product portfolios, expand our pipeline, diversify revenue, access health care providers in primary care, add a significant number of health care prescribers to our called-on universe and to better position Salix for success in the present as well as the future. Additionally we look forward to all of our stakeholders – patients, healthcare providers, employees and stockholders – benefiting from the increased scale created by a larger, even stronger Salix.”
 
Gerald T. Proehl, president and CEO of Santarus, stated, “I would like to thank all of our employees for their contributions to making Santarus the successful company it is today. We believe the timing is right for this strategic combination with Salix, a highly respected company that is uniquely positioned to expand the commercialization of Santarus’ marketed products and to continue to advance the development of our pipeline products. We welcome the opportunity Salix will provide to build on Santarus’ success.”
 
Under the terms of the definitive merger agreement, Salix intends to commence a cash tender offer to acquire all of the outstanding common stock of Santarus for $32.00 per share. Following successful completion of the tender offer, Salix will acquire all remaining shares of Santarus common stock not tendered in the offer through a second step merger at the same price per share paid in the tender offer. The consummation of the tender offer is subject to various conditions, including a minimum tender of at least a majority of the outstanding shares of Santarus common stock on a fully diluted basis, the expiration or termination of the waiting period under the Hart Scott Rodino Antitrust Improvements Act and other customary closing conditions. The Board of Directors of Santarus unanimously recommends that Santarus stockholders tender their shares in the tender offer.
 
In connection with the merger agreement, Salix and Santarus entered into an agreement with Santarus’ licensor Cosmo Technologies Limited restructuring certain aspects of Santarus’ relationship with Cosmo. Under the terms of the agreement, Salix will be returning rifamycin SV MMX® to Cosmo Technologies effective with the closing of Salix’s acquisition of Santarus.
 
Salix Pharmaceuticals, Ltd., headquartered in Raleigh, North Carolina, develops and markets prescription pharmaceutical products and medical devices for the prevention and treatment of gastrointestinal diseases. The company in-licenses late-stage or marketed proprietary therapeutic products, completes any required development and regulatory submission of these products, and markets them through the company’s gastroenterology specialty sales and marketing team.
 
Santarus, Inc. is a specialty biopharmaceutical company focused on acquiring, developing and commercializing proprietary products that address the needs of patients treated by physician specialists. The company's current commercial efforts are focused on five products. UCERIS® (budesonide) extended release tablets for the induction of remission in patients with active, mild to moderate ulcerative colitis and ZEGERID® (omeprazole/sodium bicarbonate) for the treatment of certain upper gastrointestinal disorders are promoted to gastroenterologists. GLUMETZA® (metformin hydrochloride extended release tablets) and CYCLOSET® (bromocriptine mesylate) tablets, which are indicated as adjuncts to diet and exercise to improve glycemic control in adults with type 2 diabetes, and FENOGLIDE® (fenofibrate) tablets, which is indicated as an adjunct to diet to reduce high cholesterol, are promoted to endocrinologists and other physicians who treat patients with type 2 diabetes.
 
Source: Salix Pharmaceuticals

Lloyd Dunlap

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