Canada’s Valeant Pharmaceuticals International Inc. agreed to acquire gastrointestinal drugmaker Salix Pharmaceuticals Ltd in an all-cash deal valued at about $10.1 billion, the two companies said.
The deal for Salix, known for its irritable bowel syndrome drug Xifaxan, was approved by the boards of directors of both companies, the companies said in a news release.
The companies said the deal had an enterprise value of $14.5 billion, which would include Salix’s debt and any cash on hand. Valeant will pay $158.00 a share, valuing the all-cash transaction at about $10.1 billion.
The merger is expected to yield more than $500 million in annual cost savings within six months, the release said.
The transaction is expected to close in the second quarter of 2015, and is subject to customary closing conditions and regulatory approval.
The deal is the largest ever for Laval, Quebec-based Valeant, which lost a takeover contest for Allergan Inc last year. The usually acquisitive Valeant slowed its buying pace dramatically while it pursued Allergan, and Chief Executive Michael Pearson said last month that it would focus on buying smaller, private companies in 2015.
In the meantime, Bristol-Myers Squibb Co said it would buy privately held drugmaker Flexus Biosciences Inc. for up to $1.25 billion to add an emerging class of cancer-fighting drugs to its pipeline.
The deal value includes $800 million in an upfront payment and up to $450 million of milestone payments, Bristol-Myers said in a statement yesterday.
Separately, Bristol-Myers also signed a deal with Rigel Pharmaceuticals Inc. to develop a line of cancer therapies that can be used with Bristol-Myers’simmunotherapy cancer drugs Opdivo and Yervoy.
Bristol-Myers will pay Rigel $339 million, including milestones, bringing the drugmaker’s investment in cancer treatments yesterday to $1.59 billion.
Buying Flexus will give Bristol-Myers rights to an experimental cancer compound belonging to a class of drugs called IDO1-inhibitors, which work by disrupting mechanisms through which cancer cells hide from the body’s immune cells.
Bristol-Myers currently has eight cancer compounds in various stages of development, four of which are designed to make the body fight cancer on its own. None of them are IDO-inhibitors. Flexus’s remaining assets, which are also cancer related, will be part of a newly-formed company, Bristol-Myers said.