Cubist Pharmaceuticals Inc. (CBST:US) agreed to buy Trius Therapeutics Inc. (TSRX:US) and Optimer Pharmaceuticals Inc. (OPTR:US) for as much as $1.62 billion, gaining approved and experimental antibiotics for its roster of medicines.
Cubist will acquire San Diego-based Trius for $13.50 a share or about $707 million in cash, a premium of 15 percent over yesterday’s closing price. Trius shareholders also will get a contingent value right of as much as $2 for each share they own for sales milestones, bringing the value of the deal to as much as $818 million, the companies said in a statement.
The company also announced it agreed to purchase Jersey City, New Jersey-based Optimer for $10.75 a share, or $535 million in cash. Cubist will give each Optimer shareholder a contingent value right of as much as $5 for each share, based on sales of Dificid, Optimer’s top product, raising the value of the purchase to $801 million, the companies said.
Cubist, with revenue of $926.4 million in 2012, specializes in antibiotics used to treat drug-resistant infections acquired in hospitals. Chief Executive Officer Michael Bonney said the acquisitions will help the company attain its goal of $2 billion in revenue by 2017. If all its products are approved, Cubist may provide four of the 10 new antibiotics the Infectious Diseases Society of America has said the world will need by 2020, Bonney said yesterday in a conference call with analysts.
“Each of these acquisitions is significant and valuable in its own right,” Bonney said. “The stars just happened to align in such a way we can do both.”
Cubist gained (CBST:US) 9.4 percent to $62.33 at the close in New York, it’s highest price since September 2000.
With the purchases, Cubist gets Dificid, approved to combat a diarrhea-causing infection commonly acquired in hospitals, and Trius’s tedizolid phosphate, a medicine in late-stage trials intended to treat staph infections resistant to the common antibiotic methicillin. Dificid gained FDA approval in May 2011 as the first new antibiotic approved in 25 years for treatment of infections by the bacteria clostridium difficile. Optimer reported 2012 sales of $62.4 million for the drug.
Optimer’s shares (OPTR:US) fell 5.9 percent to $12.51. The purchase, if Dificid sales goals are met, would provide a premium of as much as 19 percent to yesterday’s closing price with the maximum contingent value right. Trius gained 20 percent today to $14.10, the biggest single-day increase since its shares were first sold to the public in August 2010.
“Given Cubist’s outstanding hospital-based commercial infrastructure and our first-hand experience co-promoting Dificid in the U.S., we are uniquely positioned to maximize Dificid’s full potential for the benefits of patients, hospitals and our shareholders,” Bonney said in a statement.
Trius, he said, “is a tremendous strategic fit with Cubist” and its experimental drug “has the potential to be an important new tool in the infectious disease community’s battle against resistant infections caused by MRSA.”
The two drugs are expected to eventually generate sales of $600 million to $1 billion a year, Bonney said during the conference call, and should add to Cubist’s profits beginning in 2015. The company will mostly use cash (CBST:US) for the acquisitions --it had $1 billion at the end of the second quarter, according to data compiled by Bloomberg -- and “will seek additional financing” including debt, Michael Tomsicek, Cubist’s chief financial officer, said on the conference call.
Cubist’s top-selling drug (CBST:US) is Cubicin, used to combat Methicillin-resistant Staphylococcus aureus, or MRSA. The medicine had sales of $859.7 million in 2012, generating about 93 percent of the company’s revenue.
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