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Cubist Becomes Dominant Antibiotic Seller With Optimer, Trius Buys

Stocks in this article: CBST OPTR TSRX

LEXINGTON, Mass. ( TheStreet) -- Cubist Pharmaceuticals (CBST) is making an aggressive move to expand its antibiotic business, by acquiring Optimer Pharmaceuticals (OPTR) and Trius Therapeutics (TSRX), the company announced Tuesday afternoon.

Cubist already markets the antibiotic Cubicin but once the two deals closed, the company will control Optimer's currently approved antibiotic Dificid as well as Trius' late-stage antibiotic candidate tedizolid.

Recently, TheStreet contributor David Sobek explained the case for Cubist buying Optimer and/or Trius.

Cubist was already partners with Optimer, helping to market Dificid. Under terms of the deal, Cubist will pay $10.75 per share for each share of Optimer stock, plus a contingent value right redeemable for cash up to $5 per share. The deal is valued at $535 million excluding the CVR and up to $808 million if the full value of the CVR is realized.

Optimer closed Tuesday at $13.29, so technically speaking the deal is a "take under" unless the value of the CVR is realized.

The value of the Optimer CVR is tied to future sales of Dificid. Cubist will pay out $3 in cash for the Optimer CVR is Dificid sales reach $250 million; $4 for Dificid sales of $275 or more; and $5 for Dificid sales greater than $300 million.

Cubist is acquiring Trius for $13.50 per share in cash, or $707 million. The deal also includes a CVR redeemable for up to $2 per share if certain commercial milestones are reached. The total value of the transaction including the CVR is $818 million.

Trius shares closed Tuesday at $11.71, so Cubist's buyout price represents a 15 percent premium, minus the CVR.

-- Reported by Adam Feuerstein in Boston.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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