Encysive Snags a Buyer

Updated from 12:14 p.m. EST

Pfizer(PFE) has agreed to purchase Encysive Pharmaceuticals(ENCY), a company infamous for its failed attempts at approval for its main product, pulmonary arterial hypertension drug Thelin.

Pfizer will pay $2.35 a share, or about $195 million, for rights to Encysive's pipeline -- namely Thelin, which is still unapproved in the U.S. The deal represents a more than 100% premium to Encysive's closing share price Tuesday of $1.08.

Encysive's badgered stock, which traded in the $3 range earlier this month after being around $9 in February of 2006, soared to $2.27 on Wednesday on the buyout news.

Houston-based Encysive put itself on the block in July, following repeated setbacks in its pursuit of Food and Drug Administration approval for Thelin for PAH, or high blood pressure in the pulmonary artery. Since 2006, the agency has dealt the company three approvable letters indicating Thelin could be cleared only with additional data supporting its use.

Pfizer said Wednesday that it plans to conduct the late-stage trial needed to support U.S. approval of Thelin, which is already approved in the European Union and would compete with Gilead's(GILD) Letairis and Actelion's Tracleer.

Encysive said earlier this year that it expects worldwide Thelin sales in the $40 million to $50 million range for 2008. Pfizer said expects the acquisition to add to its near-term revenue from the European market and increase its presence in the cardio-respiratory arena, complementing its PAH drug Revatio -- better known as Viagra and also marketed for erectile dysfunction.

"We look forward to applying Pfizer's significant resources to the launch of Thelin in additional countries," said Ian Read, president of Pfizer's Worldwide Pharmaceutical Operations, in a press release.

The transaction is expected to close in the second quarter. . Upon close, Pfizer also will assume Encysive's change of control repurchase obligations under its 2.5% convertible senior notes.

Shares of Pfizer recently were down 3 cents to $22.34.

>To order reprints of this article, click here: Reprints