NEW YORK (TheStreet) -- Big pharma buyouts have squashed talk of a biotech bubble. This morning, Forest Laboratories (FRX) announced it would acquire Furiex Pharmaceuticals (FURX) for about $1.1 billion, or $95 per share. Forest will pay an additional amount, up to $30 per share or $360 million, should Furiex's drug eluxadoline, a treatment for irritable bowel syndrome, receive broad approval.
The merger is the latest in a series of billion-plus biotech deals announced in the past few months. And investors on StockTwits.com say it confirms that biotech valuations were never that frothy, as many suggested when the sector sold-off last month.
$FURX Even if milestone achieved later and deal sweetened, still gets done below top tick. Goes to show bios were priced for perfection.- JLL IV (@TXplunger) Apr. 28 at 08:42 AM
The Furiex acquisition comes a few months after Actavis (ACT) announced it would acquire Forest Laboratories for $25 billion in equity and cash. At the time of the announcement, Actavis said that the combined company would have annual revenues of over $15 billion in 2015. Forest made it clear that its "blockbuster" gastrointestinal drugs were a major reason for the deal.
The Furiex purchase also comes in the wake of Pfizer's (PFE) pursuit of AstraZeneca (AZN). Pfizer management said in a press release early this morning that it attempted to acquire AstraZeneca for $76.62-per-share in January. AstraZeneca declined the offer, saying it significantly undervalued its drug pipeline. Pfizer contacted AstraZeneca management on April 26 seeking to renew merger discussions.