(Updates with closing share prices in fifth paragraph.)
Oct. 24 (Bloomberg) -- Cubist Pharmaceuticals Inc., the maker of the antibiotic Cubicin, said it will acquire Adolor Corp. for $190 million in cash to gain a constipation drug. Adolor shares rose the most in almost 11 years.
Adolor investors will receive $4.25 a share as well as a so-called contingent payment right of as much as $4.50 a share if certain regulatory approvals are met, Lexington, Massachusetts-based Cubist said in a statement today. The acquisition is valued at as much as $415 million, net of Adolor’s third-quarter cash balance, the companies said.
Cubist will gain Adolor’s Entereg constipation medicine, which generated $25.4 million for the Exton, Pennsylvania-based company last year. Adolor is also testing a treatment for opioid-induced constipation, and the contingent payment right is subject to that drug’s approval and commercialization.
“This transaction is an excellent strategic fit for Cubist and the latest milestone in what has been a transformational year for the company,” Michael Bonney, Cubist’s chief executive officer, said in the statement.
Adolor more than doubled to $4.67 at 4 p.m. New York time, the biggest jump since the company first sold shares to the public in November 2000. Cubist fell 1.9 percent to $39.60.
Both companies’ boards unanimously approved the deal, which is expected to close in the fourth quarter of this year, according to the statement. Morgan Stanley acted as financial adviser to Cubist, while Ropes & Gray LLP provided legal counsel. Stifel Nicolaus Weisel was financial adviser to Adolor and Dechert LLP served as legal counsel.
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