Depomed once again rejects Horizon Pharma's revised takeover offer

Depomed Inc yesterday rejected Irish biopharmaceutical firm Horizon Pharma Plc's hostile takeover bid for the third time, saying that the latest offer undervalued the company.

Depomed said Horizon Pharma's latest all-stock bid had a current value of $30 per share, and was is lower than its previous offer of $33.

Dublin-based Horizon Pharma last week offered 0.95 Horizon Pharma shares for every Depomed share. It had also said it could alternatively offer Depomed shareholders $32.50 in cash and stock.

''Depomed notes that the all-stock proposal has a current value below $30 per share, which is less than the $33 per share proposal Horizon previously made, and represents ownership in the combined company of less than 29 per cent, which we believe is well below what Depomed would contribute to the combined company,'' the Newark, California-based company said in a statement.

Horizon Pharma first tabled its offer in May and went hostile with its offer in July after being rejected. Depomed later adopted a poison pill to block the bid.

Depomed is a specialty pharmaceutical company focused on drugs to treat pain and neurology-related disorders. Its products include Nucynta for management of pain, Gralise for postherpetic neuralgia, Cambia for acute migraine and Zipor, a non-steroidal drug for pain in adults, etc.

Early this year, it bought the rights to Nucynta from Johnson & Johnson for $1.05 billion.

Its Glumetza drug has been approved for the treatment of type II diabetes in adults, and is sold in the US by Valeant Pharmaceuticals.

It has also developed and licensed a unique drug-delivery technology called Acuform – a patented oral-delivery technology that allows targeted extended release of pharmaceutical compounds into the upper gastrointestinal tract.

In 2014, Depomed reported revenue of $390 million with net income of $132 million.

Horizon Pharma markets seven medicines through its orphan, primary care and specialty business units for the treatment of arthritis pain and rare diseases. Its Duexis, Pennsaid, Vimovo and Rayos drugs are used in the treatment of arthritis pain and inflammation, while it's Buphenyl, Ravicti and Actimmune drugs are used for treatment of rare diseases.

Apart from Ireland, the company has operations in the US, Germany and Switzerland.

The company reported a 118-per cent jump in revenue at $113 million for the first quarter, compared to $52 million for the same quarter a year ago. Net loss for the period reduced from $206 million to around $20 million.

For the current year, the drug maker has increased its guidance by about 30 per cent to $590-$610 million, on the back of its newly-launched non-steroidal osteoarthritis pain reliever Pennsaid 2%, and strong performance from its arthritis drugs Duexis and Vimovo.

A merged company will have 13 marketed drugs, nearly doubling Horizon Pharma's current portfolio of seven, and is expected to result in 2015 net sales of over $950 million.