By John Kell
Cubist Pharmaceuticals Inc. (CBST) unveiled a pair of deals to
acquire two smaller biopharmaceutical peers, transactions that
could total a combined $1.6 billion if certain sales milestones are
achieved.
In separate press releases, Cubist said it was paying about $535
million to acquire Optimer Pharmaceuticals Inc. (OPTR) and $707
million to buy Trius Therapeutics Inc. (TSRX). The news sent
Cubist's shares up 2.6% to $58.50 in after-hours trading.
Trius's shares jumped 20% to $14.10 in after-hours trading,
while Optimer's slid 9.6% to $12.02.
In addition to the $10.75-a-share cash offer for Optimer, Cubist
says each stockholder of Optimer will receive a right that enables
the shareholder to receive an additional one-time cash payment of
up to $5 for each share owned.
The additional payment, which would bring the total transaction
value to up to $801 million, would depend on if certain sales
milestones of Optimer's Dificid, which is a treatment for
bacterial-associated diarrhea, are achieved.
The deal for Optimer comes after the company earlier this year
said it was exploring a number of strategic options, as part of a
larger overhaul of top management at the company. Media reports
said Optimer received several first-round offers, including an
offer from Cubist.
Cubist and Optimer already have a history, as the companies
inked a two-year agreement in April 2011 under which Cubist has
been co-promoting Dificid to physicians, hospitals and other
health-care institutions in the U.S. Concurrently with the merger
agreement, the companies extended the co-promotion agreement for up
to one year.
Dificid was launched in the U.S. in July 2011. Sales for the
drug totaled $62.4 million in the U.S. and Canada in 2012, up
sharply from $21.5 million the prior year. The drug's sales also
grew 17% in the first quarter.
The payment tied to the performance of Dificid's sales will take
into consideration cumulative net sales of the drug from July 1 of
this year through the end of 2015. If, for example, cumulative net
sales exceed $300 million, the one-time cash payment would total $5
per share. Cubist and Optimer expect to close the transaction later
this year.
Morgan Stanley (MS) is acting as exclusive financial adviser to
Cubist, while J.P. Morgan Chase & Co. (JPM) and Centerview
Partners LLC are advising Optimer.
For Trius, Cubist said it will buy all outstanding shares for
$13.50 in cash, or about $707 million, representing a premium of
15% to Trius's closing price Tuesday. The transaction, expected to
close later this year, could be valued at up to $818 million if the
company's late-stage antibiotic candidate achieves certain sales
milestones.
Cubist said it is expected that a new drug application for the
late-stage treatment for some skin infections will be submitted to
the U.S. Food and Drug Administration for the second half of 2013.
Trius has also already partnered with Bayer AG (BAYN.XE) for the
development and commercialization of the treatment in Canada and
the European Union.
Barclays PLC (BCS, BARC.LN) has advised Cubist on the Trius
deal, while Citigroup Inc. (C) and Centerview are advising
Trius.
Write to John Kell at john.kell@wsj.com
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