Indevus Buying Valera

It sees a strong urology focus.
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Indevus (IDEV) - Get Report agreed to buy Valera Pharmaceuticals (VLRX) - Get Report for $7.75 a share in stock, or $120 million, plus contingent payments of up to $3.50 per share based on the achievement of future product milestones.

Cranbury, N.J.-based Valera is a specialty pharmaceutical company focused on the development and commercialization of urology and endocrinology products.

"The acquisition of Valera firmly establishes Indevus as an emerging leader in the specialty areas of urology and men's health and fully leverages our national sales force," said Glenn L. Cooper, CEO of Lexington, Mass.-based Indevus. "Upon closing, Indevus' robust product portfolio will include three marketed products, and the combined company anticipates five new product launches within two years, including three products from Valera."

Each share of Valera common stock will be exchanged for $7.75 in Indevus common stock, provided the volume-weighted average closing price for Indevus common stock is between $6.59 and $8.05 during the 25-trading-day period ending five trading days prior to the meeting of Valera stockholders to vote on the merger. Each Valera share exchanged would be converted into not more than 1.1766 shares of Indevus common stock and not less than 0.9626 shares of Indevus common stock.

In addition, each share of Valera common stock will also be converted into three contingent stock rights relating to three Valera products in various stages of development. One CSR is convertible into $1 of Indevus common stock upon FDA approval of Supprelin-LA and the availability of sufficient launch quantities, one CSR is convertible into $1 of Indevus common stock upon FDA approval of the biodegradable ureteral stent, and one CSR is convertible into $1.50 of Indevus common stock upon FDA approval of the octreotide implant.

In connection with the transaction, certain affiliated funds of Sanders Morris Harris, Valera's largest shareholder, and one other large shareholder of Valera, have entered into voting agreements in which they have agreed to vote shares representing approximately 41% of Valera's outstanding shares in favor of the merger.

The merger has been approved by the boards of directors of Indevus and Valera and is expected to be completed on or around April 30, 2007.