Valeant buys Medicis for $2.6 billion

October 1, 2012

Valeant Pharmaceuticals has agreed to acquire Medicis Pharmaceutical for $44 per share in cash, in a deal worth approximately $2.6 billion.

Montreal - Valeant Pharmaceuticals has agreed to acquire Medicis Pharmaceutical for $44 per share in cash, in a deal worth approximately $2.6 billion.

The price of the transaction, which is expected to close in the first half of 2013, represents a 39 percent premium to Medicis' closing share price on Aug. 31, according to company reports. The deal has been approved by each company's board of directors.

Valeant CEO Michael Pearson said the acquisition, which gives Valeant access to Medicis’ Solodyn (minocycline) and Dysport (abobotulinumtoxinA), is a step toward strengthening its "presence in acne, actinic keratosis, aesthetic injectables and antivirals, among others." Mr. Pearson described Medicis' portfolio of branded products as "highly complementary" and that its "pipeline is a solid strategic fit."

According to Valeant, the pro forma net revenue for the combined company's dermatology and aesthetics businesses for 2012 is expected to exceed $1.7 billion in the United States. The combined company's commercial dermatology operations, which will be located in Scottsdale, Ariz., will operate under the name Medicis to take advantage of its recognition in the marketplace.

In addition, the company's dermatology research and development operations will be located in Laval, Quebec; Scottsdale, Ariz.; and Petaluma, Calif., while corporate support functions will be primarily based in New Jersey. Including the Medicis deal, which sources cited in a Wall Street Journalreport first alluded to in August 2011, Valeant's acquisitions this year total more than $3.5 billion, according to company reports.

Research and development "is not a good use of shareholder money" and Valeant prefers to buy companies with trusted products already on the market, Mr. Pearson says.