Will the Move Counter Generic Competition? In the event of the deal materializing, Endo would get access to drugs like Xiaflex (Peyronie's disease and dupuytren’s contracture), Stendra (erectile dysfunction), Striant (a buccal system for testosterone delivery) and Testim (hypogonadism). Endo is looking to revive the segment through this impending buy. In the event of Auxilium Pharma accepting Endo’s offer, it will be interesting to see what happens to the QLT deal.Īt Endo’s end, the company’s men’s health division has struggled over the past few quarters. The deal was mainly aimed at tax savings (read more: Auxilium and QLT to Merge on Tax Saving Attractions). We expect Auxilium Pharma to respond favorably to the takeover bid.Īuxilium Pharma had inked a deal earlier in the year to merge with Canadian entity, QLT ( QLTI). With Auxilium Pharma struggling as a stand alone entity, the takeover offer by Endo offers significant value. We expect the shares of both Auxilium Pharma as well as Endo to be positively impacted by the news. Auxilium Pharma expects to reduce annual operating expenses by at least $75 million as a result of the move (read more: Auxilium Pharmaceuticals to Restructure, Cut Jobs by 30%).Įndo noted that the acceptance of its offer would result in far greater savings for the combined entity. The company announced earlier in the month that it will reduce its workforce by 30% to drive the bottom line. Endo’s offer thus appears to be lucrative for Auxilium Pharma’s stockholders.Īuxilium Pharma has reported disappointing results over the past few quarters, hurt by declining sales of some of its key products. Furthermore, the offer price represents a premium of 40% to Auxilium Pharma’s average closing price over the past 30 trading days. The offer price of $28.10 per share is 31% above Auxilium Pharma’s closing price of $21.52 on Sep 16. Offer Price Represents Substantial Premium Endo expects the transaction to be accretive to its adjusted earnings per share immediately after closure. The company said that it will also resort to debt financing for the purpose. Endo intends to utilize its existing cash balance to fund the deal. In a bid to expand its product portfolio/pipeline, Endo International ( ENDP) submitted a proposal to take over Auxilium Pharmaceuticals ( AUXL) for $2.2 billion in cash as well as stock.
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