Salix acquiring San Diego pharmaceutical company for $2.6 billion

11/07/2013 4:32 PM

11/07/2013 4:33 PM

Salix Pharmaceuticals announced late Thursday that it is acquiring Santarus, a San Diego-based specialty pharmaceutical company for $2.6 billion.

Salix is acquiring Santarus for $32 a share, or 36 percent above where the company’s share price closed Wednesday. The deal is expected to close in the first quarter of next year.

Raleigh-based Salix sells drugs to treat gastrointestinal ailments, an area that Santarus also focuses on. The combined company will have a portfolio of 22 products and estimated annual revenue of nearly $1.35 billion.

“We look forward to combining the assets of both companies to create a larger, even strong company with greater scope and impact than either company could accomplish independently,” Carolyn Logan, Salix’s CEO, said on a conference call with analysts.

While both companies have the same general focus, there is not expected to be any overlap in their marketed products. Santarus’ drugs include Uceris, a treatment for ulcerative colitis, and the heartburn treatment Zegerid.

Salix also announced its third-quarter earnings after the markets closed Thursday. Revenue totaled $238.2 million, up 29 percent compared to the same period a year ago.

Salix reported net income of $47.3 million, or 71 cents per share. The beat the 56 cents that was the consensus among analysts who cover the company.

Revenue from Saix's best-selling drug, Xifaxan, which is approved to treat travelers' diarrhea and a rare liver condition, increased 20 percent in the third quarter to $165.9 million.

Salix shares closed Thursday at $71.31, down $1.73. The stock is up 76 percent this year.

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