Forest Laboratories Inc., maker of the Alzheimer’s drug Namenda, will buyAptalis Pharma for $2.9 billion, adding treatments for gastrointestinal ailments and cystic fibrosis.
Aptalis, a closely-held company whose shareholders include investment firm TPG Capital, generated $688 million in sales in the 12 months ended in September, New York-based Forest said in a statement today. The all-cash deal is expected to close in the first half of this year, Forest said.
The acquisition is the first at Forest for Chief Executive Officer Brent Saunders, who took over Oct. 1. The company, which had $3.09 billion in sales in the last fiscal year, is seeking new products to offset the loss of patent protection for its former top-seller, the antidepressant Lexapro. The drug’s sales fell to $194.9 million in the 12 months ended in March, from $2.13 billion a year earlier.
“On a broad level, investors will likely see this as the new CEO executing his change agent mandate,’” said David Maris, an analyst at BMO Capital Markets, in a note to clients. “This deal solves more problems than it creates in the intermediate term, and as such, should result in significantly higher estimates and a boost to the shares.”
The acquisition is expected to add about 78 cents a share to Forest’s profit in the 2015 fiscal year, Saunders said.
“Aptalisis an excellent strategic and financial fit” with “strong product offerings in two therapeutic franchises that are complementary to Forest,” Saunders said in the statement. The deal “helps diversify Forest while advancing our strategy to create blockbuster therapeutic areas.”
Aptaliswas called Axcan Pharma Inc. when TPG agreed to acquire the company for $1.3 billion in November 2007. The company is based in Bridgewater, New Jersey.
Forest gained 13 percent to $66.48 at 8:08 a.m. New York time. The shares had increased 59 percent in the 12 months through yesterday.