Bloomberg News

Optimer Said to Draw Takeover Interest From Glaxo

April 02, 2013

Optimer Pharmaceuticals Inc. (OPTR:US), the antibiotics maker that’s weighing a sale, drew interest from drugmakers including GlaxoSmithKline Plc (GSK) and Japan’s Astellas Pharma Inc. (4503), said two people familiar with the matter. The shares gained the most in more than four years.

The maker of the antibiotic Dificid aims to fetch as much as $1 billion in a possible auction, said the people, who asked not to be named because the process is private. Optimer also attracted interest from Cubist Pharmaceuticals Inc. (CBST:US) and AstraZeneca Plc (AZN), said one of the people.

Buying Optimer would enable the drugmakers to generate more revenue from hospitals, as Dificid, the company’s sole product on the market, treats a bacterium linked to intestinal infections in hospitalized patients. The drugmaker, based in Jersey City, New Jersey, also may prove attractive to peers that already distribute to medical facilities and could use existing distribution channels to reduce costs.

While Cubist is ending a sales agreement with Optimer and developing a competing drug, it may still need the antibiotic in its portfolio, said Marko Kozul, an analyst with Boston-based Leerink Swann & Co. “By the time the Cubist drug would even make it to market, were it to make it to market, Dificid would have multiple supplemental indications,” Kozul said in a telephone interview.

Shares Climb

Optimer shares climbed 19 percent to $13.91 at 4 p.m. New York time, their biggest one-day increase since November 2008. The rise gives the company a market value of about $666 million.

Optimer said on Feb. 27 that the board would examine “a full range” of strategic alternatives. The company is working with Centerview Partners LLC and JPMorgan Chase & Co. on the process.

Dificid was approved in 2011 and sales (OPTR:US) last year were $62 million. Optimer’s revenue is projected by analysts to grow to $310 million by the end of 2017, according to data compiled by Bloomberg.

Former Chairman Michael Chang left Optimer last year after the board found that he failed to identify and manage conflict of interest issues tied to a stock grant. The company also replaced Chief Executive Officer Pedro Lichtinger in February, when Optimer disclosed the board’s strategic review.

Representatives for JPMorgan, Astellas, Glaxo, Cubist and AstraZeneca declined to comment. Optimer spokesman David Walsey didn’t return calls seeking comment.

Strategic Fit

A purchase of Optimer might fit with what large drugmakers have described as their deal strategy. Pharmaceutical companies have, for the most part, said they’re uninterested in mega- deals, preferring to aim for bolt-on acquisitions of a single product or small portfolio.

AstraZeneca and Glaxo both have antibiotic portfolios in development or for sale, and AstraZeneca’s new CEO Pascal Soriot said on a March 21 call with investors that he was interested in investing more in the area.

Along with Cubist’s experimental drug, other potential competitors include an injection being developed by AstraZeneca’s Medimmune unit, according to Leerink’s Kozul. That drug could cost $10,000 to $15,000, much more than Optimer’s drug, he said.

“Its use is not going to be cannibalizing a large portion of the market,” said Kozul. Another potential competitor is fecal transplant procedures, in which a sick patient gets the feces of a healthy person inserted into their intestines. It’s not clear whether the treatment will catch on, said Kozul.

In April 2011, Optimer and Cubist signed a two-year agreement to jointly market Dificid to doctors and health-care facilities. The agreement gave Optimer the benefit of Cubist’s sales force to expand distribution of the drug.

To contact the reporters on this story: David Welch in New York; dwelch12@bloomberg.net; Jeffrey McCracken in New York at jmccracken3@bloomberg.net; Drew Armstrong in New York at darmstrong17@bloomberg.net;

To contact the editor responsible for this story: Jeffrey McCracken at jmccracken3@bloomberg.net


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Companies Mentioned

  • CBST
    (Cubist Pharmaceuticals Inc)
    • $68.69 USD
    • -0.22
    • -0.32%
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