Actavis To Acquire Durata Therapeutics In $675 Mln Deal

(RTTNews) - Specialty pharmaceutical company Actavis plc (ACT) agreed Monday to acquire Durata Therapeutics, Inc. (DRTX) for $23.00 per share in an all-cash deal valued at about $675 million. The deal, subject to regulatory approvals, is expected to close in late 2014 or early 2015.

The shareholders of Durata will also receive contingent value rights or CVRs for additional cash payments of up to $5.00 per share on reaching certain regulatory thresholds or commercial milestones related to Durata's lead product Dalvance.

The deal closure is also subject to the tendering of at least one share more than 50 percent of the outstanding shares of Durata common stock on a fully-diluted basis.

The offer price represents a hefty 65.7 percent premium over Durata's closing share price of $13.88 on Friday. It also represents a 101.7 percent premium including the CVR. Meanwhile, Durata shares are soaring more than 77 percent in pre-market trading on Monday.

Following the completion of the deal, Durata will merge with and become a subsidiary of Actavis and Durata's shares will be delisted from NASDAQ. Actavis expects the deal to be accretive by the end of the first year.

"The acquisition of Durata is a strong strategic fit that strengthens Actavis' emerging infectious disease franchise and aligns with our stated goal to make smart, targeted investments that complement our existing businesses and position the Company for continued long-term growth," Actavis President and CEO Brent Saunders said in a statement.

The deal will boost Actavis' long-term growth profile beyond 2015. It will also bolsters Actavis' infectious disease expertise by the addition of an experienced development and commercial team from Durata. It will also leverages Actavis' hospital sales and marketing capabilities.

The acquisition of Durata immediately enhances Actavis' Infectious Disease portfolio with the addition of Dalvance (dalbavancin) for injection, which is the first and only IV antibiotic for acute bacterial skin and skin structure infections (ABSSSI) with once-a-week dosing for two weeks.

"DALVANCE is a novel antibiotic that can be used in multiple sites of care. It complements our Teflaro product and ceftazidine-avibactam, currently in late-stage development, which are intended for use in the inpatient setting," Saunders added.

Dalvance was approved by the U.S. Food and Drug Administration on May 23, and was the first drug approved as a Qualified Infectious Disease Product (QIDP).

"Actavis recognizes DALVANCE as a strong development asset with significant potential. By joining Actavis, we gain additional resources, commercial reach and scale to expand patient access and realize the full potential of DALVANCE in the marketplace," Durata CEO Paul Edick stated.

For the deal, BofA Merrill Lynch is serving as financial advisor to Durata, while Wilmer Cutler Pickering Hale and Dorr LLP is serving as its legal advisor. Debevoise & Plimpton LLP is serving as Actavis' legal advisor.

Meanwhile, Actavis also reportedly made an offer to acquire Botox maker Allergan, Inc. (ALGN) last month. However, Allergan is said to have rejected the offer as it was focused on finalizing a deal with Salix Pharmaceuticals Ltd. (SLXP) in order to fend off a $53 billion hostile bid from Canada-based Valeant Pharmaceuticals Inc. (VRX, VRX.TO).

ACT closed Friday's regular trading session at $246.07, up $5.96 on a volume of 4.06 million shares, and DRTX closed at $13.88, up $1.27 on a volume of 1.11 million shares.