The transaction significantly expands Valeant’s business in North America and enhances the company’s neurology franchise through the acquisition of key products and a specialized neurology sales organization.
The transaction adds several marketed neurology products that include Diastat, the only product approved for treatment of acute repetitive epileptic seizures outside of a hospital setting, and Migranal, a nasal spray used for the treatment of acute migraine headaches.
The transaction also adds retigabine, a novel phase III candidate in clinical development for the treatment of epilepsy, to Valeant’s pipeline. Valeant plans to market retigabine in the US and key foreign markets once the phase III trials are completed, subject to regulatory approval.
The transaction is valued at approximately $280 million plus expenses, including retirement of $44 million in Xcel Pharmaceuticals debt. Valeant will pay either $280 million in cash or a combination of $230 million in cash and $50 million in shares of its common stock.
“In addition to the immediate expansion opportunity that Xcel provides for our growing neurology franchise in the US, the combined infrastructure of both companies can be further leveraged towards future product launches,” said Timothy Tyson, Valeant’s president and CEO. “The Xcel acquisition provides Valeant with access to an excellent marketed product portfolio and a pipeline product with significant market potential in the US and in our key foreign markets.”
The Xcel transaction is expected to be modestly accretive to earnings in 2005, excluding the impact of acquired in-process R&D, currently estimated to be $120 million.