The Burrill Report

Bausch & Lomb is buying the eye drug developer Ista Pharmaceuticals for approximately $500 million after the company rejected offers from Valeant Pharmaceuticals. Bausch & Lomb said it will pay $9.10 per share for the company, representing an 8.6 percent premium.

The purchase price included warrants and a small amount of Ista’s existing debt. The privately owned Bausch & Lomb already has a connection with Ista as it manufactures nearly all of Ista’s currently available U.S. products. Ista generated about $160 million in revenue in 2011, primarily from sales of Bromday, a drug for reducing ocular pain following cataract surgery, and Bepreve, an anti-allergy eye drop.

News of the acquisition came shortly after Valeant Pharmaceuticals failed on two different occasions to acquire Ista. Valeant first made a run for the company in December 2011 when it made a cash offer that valued Ista at $6.50 per share or $314 million. Ista’s board of directors believed it was being undervalued and turned down the offer.

In January, Valeant raised its offer to $7.50 a share or $360 million but threatened to pull the offer if no positive progress on the acquisition was made by January 31, 2012. Ista, again unimpressed with the offer, didn’t budge, prompting Valeant to pull its bid.

Bausch & Lomb was quick to swoop in and offer a valuation that Ista shareholders were content with. Bausch & Lomb said in a press release that the acquisition fits well with its strategic efforts and believes that the addition of Ista’s portfolio will add to its earnings within the first year after the deal closes, which is expected to be during the second quarter of 2012.

“This gives us four additional marketed products and nearly doubles our late stage research and development pipeline,” says Brent Saunders, Bausch & Lomb’s CEO. Saunders also added that he expects the company to file for marketing approval with the U.S. Food and Drug Administration for Ista’s lead program, Prolensa for the treatment of eye inflammation, later this year.

Bausch & Lomb will finance the acquisition through a combination of cash and the proceeds from a $350 million term loan facility.



March 31, 2012
http://www.burrillreport.com/article-bausch_lomb_to_buy_ista_pharmaceuticals.html