Endo bids $2.2 billion for Auxilium
- The $2.2 billion offer price represents more than a 30% premium over the stock’s closing price on September 16. It is unclear whether or not Auxilium is interested in the offer.
- Endo wants to complement its core portfolio, which consists of men’s health and pain products.
- Auxilium has several products that interest Endo, including Xiaflex (collagenase clostridium hitolyticum), an FDA-approved for treatment of Dupuytren’s contracture (a disease that affects the connective tissue in the palms) and Peyronie’s disease, in which the penis has a very high degree of curvature.
Auxilium brings a portfolio that consists of 12 FDA-approved drugs in urology, orthopedic treatments, and other areas. The company is staying cagey about the deal, but has taken certain steps that provide insight into its state of mind.
Auxilium recently announced that it is cutting 30% of its staff in order to reduce expenses by more than $75 million. In addition, Auxilium is acquiring QLT, a Canadian biotech company, in a $345 million deal and shifting its headquarters over to Canada in order to reduce its tax burden. This is considered a defensive poison-pill strategy -- but analysts still expect the deal to ultimately go through.
“The most likely outcome is that Auxilium will be sold,” said Eric Schmidt, a Cowen & Co. analyst, in an interview with Bloomberg. “In general Auxilium’s shareholders have been a little bit frustrated. They’re going to be receptive to playing this out.”
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