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

Forest Laboratories Inks $1.4B Deal for Furiex

NEW YORK (The Deal) -- Forest Laboratories (FRX) said Monday it has a deal to acquire Furiex Pharmaceuticals (FURX) for upward of $1.4 billion, boosting its gastroenterology unit amid a wave of consolidation in the drug business.

Terms of the deal call for New York-based Forest, which has a separate deal in place to be acquired by Actavis (ACT), to pay $95 per share in cash and up to $30 per share in a contingent value right for Furiex. The agreement would provide Furiex holders with $1.1 billion in cash at close, and upward of $360 million in additional consideration if certain milestones are met.

Concurrent with the deal, Forest said it has agreed with Royalty Pharma to sell Furiex's royalties on two compounds for about $415 million. Forest said it expects that agreement to reduce the price paid for Furiex by about $315 million after taxes.

Morrisville, N.C.-based Furiex makes eluxadoline, a potential treatment for irritable bowel syndrome that should be submitted for regulatory approval by the end of the third quarter. Forest said the deal would build on its existing gastroenterology operation, which was built in part by a $2.9 billion purchase of Aptalis Inc. earlier this year.

Must Read: Index Investors Complicit in Pfizer's AstraZeneca Tax Scheme

"We believe eluxadoline will be very complementary to our anchor GI product Linzess and additive to our broader GI portfolio, making us more relevant to gastroenterologists and primary care physicians," Forest CEO Brent Saunders said in a statement. "With eluxadoline, we expect to have one of the broadest product offerings for the $38 billion GI disease market."

The Royalty Pharma deal does not involve eluxadoline, instead focusing on Furiex's royalties on older compounds alogliptin and Priligy.

Forest said it would use cash on hand to fund its purchase of Furiex. The company said that Actavis, which announced in February it would acquire Forest for $25 billion, supports the transaction.

The agreement continues an impressive run of dealmaking among healthcare companies. Last week, Valeant Pharmaceuticals International (VRX - Get Report) teamed with activist Bill Ackman on a $45 billion hostile bid for Botox maker Allergan (AGN - Get Report), while Novartis (NVS) said it would take a host of oncology drugs from GlaxoSmithKline (GSK) for $16 billion while selling other units to the British drugmaker. Medical device maker Zimmer Holdings (ZMH) on Thursday committed $13.35 billion to acquire Biomet, and on Friday, Prestige Brands Holdings (PBH) said it would buy Insight Pharmaceuticals for $750 million.

Furiex was advised by Bank of America Merrill Lynch and Credit Suisse Group, and received legal counsel from a Kirkland & Ellis LLP team led by Richard Brand and Stephen Fraidin along with attorneys at Wyrick Robbins Yates & Ponton LLP. Forest was advised by Covington & Burling LLP, while Royalty Pharma received advice from Goodwin Procter LLP.

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
FURX $0.00 0.00%
ACT $0.00 0.00%
AGN $313.89 -1.84%
FRX $99.00 -0.77%
VRX $89.96 3.30%


Chart of I:DJI
DOW 17,719.92 -78.57 -0.44%
S&P 500 2,080.41 -9.70 -0.46%
NASDAQ 5,108.6660 -18.8590 -0.37%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs