This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: Cubist Commits $1.6B to Bolster Antibiotics Portfolio

NEW YORK ( The Deal) -- Cubist Pharmaceuticals (CBST) on Tuesday committed up to $1.6 billion to acquire two makers of next-generation antibiotics in a bid to expand aggressively its acute care product portfolio.

Lexington, Mass.-based Cubist said it would pay up to $818 million for Trius Therapeutics (TSRX) and up to $801 million for Optimer Pharmaceuticals (OPTR), should all milestone payments be achieved. The deals would add between $600 million and $1 billion in annual sales to Cubist, already a major manufacturer of antibiotics.

Terms of the Trius deal call for Cubist to pay $13.50 per share in cash for total consideration of $707 million. Each Trius holder will also receive one contingent value right that would entitle the holder to an additional cash payment of up to $2 per share should commercial sales targets be achieved, which could add another $111 million in value.

Cubist will also pay $10.75 per share in cash for Optimer, valuing the company at $535 million, and will issue a contingent value right that could provide Optimer investors with an additional $5 per share should targets be met.

San Diego-based Trius is developing a late-stage antibiotic candidate that it hopes will be effective against drug-resistant bacteria. The company has partnered with Bayer Pharma AG for development and commercialization of its lead compound outside of the U.S., Canada and the European Union, and hopes to submit a request for approval of the drug to the U.S. Food and Drug Administration before year's end.

Cubist CEO Michael Bonney said in a statement, "Trius is a tremendous strategic fit with Cubist that supports our Building Blocks of Growth long-range goals while extending our global leadership in the acute care environment."

Under the terms of the deal Trius shareholders would receive $1 per share in additional payment should net sales of Trius products equal or better $125 million in 2016, and up to an additional $1 per share on a pro rata basis for 2016 net sales between $125 million and $135 million.

Optimer, of Jersey City, N.J., has been reviewing options since a February announcement that it was replacing its CEO. The company already has a deal in place to co-promote its antibacterial drug Dificid, which is used to treat diarrhea, with Cubist. Bonney called Optimer "a natural fit" given their existing relationship.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
TSRX $0.00 0.00%
OPTR $0.00 0.00%
CBST $101.94 0.14%
AAPL $93.74 0.00%
FB $117.58 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs