Actavis Finally Makes A Move, Pays $675 Million For Durata Therapeutics, Inc.

Actavis Finally Makes A Move, Pays $675 Million For Durata Therapeutics

October 6, 2014

By Mark Terry, Breaking News Staff

Dublin, Ireland-based Actavis and Chicago-based Durata Therapeutics, Inc. , today announced they have inked a definitive merger agreement. Under the deal, a subsidiary of Actavis will begin a tender offer to buy all outstanding share of Durata common stock for $23.00 per share in cash, or about $675 million.

Actavis focuses on developing, manufacturing and commercializing generic and brand pharmaceutical compounds worldwide. Its portfolio is broad, with products for the treatment of CNS disorders, gastroenterology, women’s health, urology, cardiovascular, respiratory and anti-infective medications. It has commercial operations in more than 60 countries with more than 30 factories and distribution centers globally. Durata focuses on infectious disease treatments and other acute illnesses.

In particular, Durata sells DALVANCE (dalbavancin), an injectable antibiotic for acute bacterial skin and skin structure infections (ABSSSI). The drug was approved in the U.S. by the FDA in May 2014, the first drug to be approved as a Qualified Infectious Disease Product (QIDP). It is also under review with the European Medicines Agency.

“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,” said Actavis president and CEO Brent Saunders in a press release. “DALVANCE is a novel antibiotic that can be used in multiple sites of care. It complements our Teflaro product and ceeftazidine-avibactam, currently in late-stage development, which are intended for use in the inpatient setting.”

As part of the deal, if DALVANCE is approved in Europe for ABSSSI, holders of contingent value rights (CVRs) from the stock sale will receive $1.00 per share. If it is approved for single dose administration by the FDA, CVR holders will also receive $1.00 per share. Holders of the CVR will receive $3.00 per share if a net global DALVANCE revenue threshold is met over a specific time period.

“This transaction will provide Durata shareholders with a strong immediate return on their investment with meaningful longer-term opportunities to participate in the future upside of DALVANCE through the CVRs,” said Paul Edick, CEO of Durata in a statement. “We look forward to working with the highly experienced Actavis team as we continue the successful launch of DALVANCE.”

In September Actavis made a bid for Allergan Inc. , maker of Botox and other therapeutics. However, Allergan, which has been embroiled in litigation with Valeant Pharmaceuticals Inc. over possible insider trading, rejected the offer. It’s not clear if this new deal is a so-called “tax inversion” plan, but with lower corporate tax rates in Ireland, it’s entirely possible.

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