Valeant Pharma raises Salix bid to $11.1 bn

Valeant Pharmaceuticals International today raised its offer for Salix Pharmaceuticals to $11.1 billion in cash after Irish specialty healthcare company Endo International tabled a competing bid.

Valeant signed a deal last month to buy Salix for $158 a share in cash, or about $10 billion, but Endo International last week tabled a competing $11.2 billion cash and stock bid. (See: Endo International tables $11.2 bn bid for Salix Pharmaceuticals)

Valeant's sweetened bid is for $173 per Salix share, a 2-per cent premium over Salix's Friday closing of $169.40.

As part of the revised deal, Salix increased the breakup fee by $100 million, to about $450 million, a move that would make another counter-bid bid by Endo more expensive.

The new offer accepted by the board of Salix has forced Endo to withdraw its offer.

''While we are disappointed with this outcome, we have been and will continue to be disciplined in our approach to potential acquisitions,'' Endo said in a statement. ''We would like to wish Salix and Valeant continued success as they move forward with their transaction.''

North Carolina-based Salix develops and markets prescription pharmaceutical products and medical devices for the prevention and treatment of gastrointestinal diseases.

Salix sells hepatic encephalopathy drug called Xifaxan, which is expected to bring in annual sales revenue of over $1 billion if the US Food and Drug Administration approves it to treat diarrhoea caused by irritable bowel syndrome.

Salix posted a loss of $414.9 million last year on revenues of $1.1 billion.

Valeant has a product portfolio of about 490 products, and has two drugs in the top 200 drugs by sales in the US. Its main markets are in the US, Canada, Mexico, Brazil, Europe and Australia.

The Ontario-based company has made over 60 acquisitions since 2008. Its latest deal was made in January when it offered to buy the prostate-cancer drug Provenge as also other assets from Dendreon Corp for $296 million.

The proposed acquisition is the latest in the about $60 billion in deals announced so far this year in the pharma and biotech industry as many companies are strengthening their portfolios as old drugs go generic.

Earlier Pfizer Inc agreed to buy Hospira Inc for about $15 billion, and AbbVie Inc agreed to buy Pharmacyclics Inc for about $21 billion.