Endo Pharmaceuticals (ENDP) announced Monday afternoon that it would buy Indevus Pharmaceuticals (IDEV) for about $370 million.

Under the terms of the merger, approved by the boards of both companies, Endo will acquire Indevus for $370 million, or $4.50per share, in cash, plus up to an extra $267 million, or $3 per share, in cash "payable in the future upon achievement of certain milestones," according to a statement from Indevus.

"We believe Endo's proven commercial capabilities, targeted approach to medical marketing and unique understanding of the changes taking place in health care delivery today will ensure the success of our current and future products," said Dr. Glenn L. Cooper, chairman and chief executive officer of Indevus.

Endo shares closed down $2.03, or 7.8%, at $24.05 Monday, and Indevus shares closed down 5 cents, or 1.6%, at $3.10.

An analyst at Caris & Co cut its rating on Endo to above average from buy Monday morning, saying the company's proposed near-term growth strategy was unclear.

Endo competes in the biotech space with Abbott Labs ( ABT) and Pfizer ( PFE). Indevus competes with Allergan ( AGN), Johnson & Johnson ( JNJ) and Watson Pharmaceuticals ( WPI).

This article was written by a staff member of TheStreet.com.

More from Stocks

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Neel Kashkari: The Heart of Our Financial System Is More Radioactive Than Ever

Neel Kashkari: The Heart of Our Financial System Is More Radioactive Than Ever

Finding Stocks Right for You: Cramer's 'Mad Money' Recap (Friday 8/25/18)

Finding Stocks Right for You: Cramer's 'Mad Money' Recap (Friday 8/25/18)

Flashback Friday: Amazon, Chip Stocks, Memorial Day

Flashback Friday: Amazon, Chip Stocks, Memorial Day

Week Ahead: Wall Street Looks to Jobs Report as North Korea Meeting Less Certain

Week Ahead: Wall Street Looks to Jobs Report as North Korea Meeting Less Certain