Forest's offer for Furiex is for $95 per share, with the variable portion – known as the “contingent value right” for eluxadoline – adding another $10 to $30 per share, depending on how favorable the FDA's classification decision is. Forest's stock dropped 0.7% during the first half day of trading following the announcement, while Furiex shares climbed 24%.
The deal still requires approval from regulators and Furiex shareholders. The transaction would be funded with cash on hand by Forest, and would be expected to close by Sept. 30.
Furiex has been developing the first-in-class eluxadoline for four years, and in February announced the results of two Phase 3 drug trials in America and Europe. The company is on track to submit a new drug application for Furiex to the FDA by Sept. 30. The drug treats symptoms of diarrhea-predominant irritable-bowel syndrome, which affects about 28 million people in the U.S. and Europe.
Eluxadoline is Furiex's lead product. The drug would complement their $2.9 billion acquisition of gastrointestinal specialty products company Aptalis earlier this year, Forest officials said.
If the Furiex merger occurs as planned, Forest plans to sell the smaller company's existing royalties on two other drugs, alogliptin and Priligy, to Royalty Pharma of New York for $415 million. Royalty said in the announcement that it is positioning itself to absorb “noncore, passive royalties” stemming from this and future pharmaceutical-company deals.
“Our goal is to become the M&A partner of choice for pharma and biotech companies, allowing them to focus their resources on strategic assets,” Royalty CEO Pablo Legorreta said in a statement.
Follow Joe Carlson on Twitter: @MHJCarlson
