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.
"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."