Valeant Pharmaceuticals International, Inc.
(
VRX
) announced yet another acquisition deal recently. This time
Valeant Pharma has entered into a deal to acquire iNova from
Australian private equity firms Archer Capital and Ironbridge.
iNova pharmaceutical group develops and markets prescription and
over-the-counter (OTC) pharmaceutical products in the Australia,
New Zealand, Southeast Asia and South Africa.
Valeant Pharma will pay shareholders of iNova 625 million
Australian dollars as upfront payment. iNova shareholders will also
be entitled to receive potential milestone payments of an
additional A$75 million depending on the pipeline success. iNova's
product portfolio includes therapeutic weight management brands
such as Duromine in addition to cold and cough OTC medicines like
Difflam and Duro Tuss. The deal is expected to be immediately
accretive and is subject to certain closing conditions.
Of late, Valeant Pharma has been on a buying spree. In late
October, 2011, Valeant Pharma bought 81.6% of the outstanding
common shares of another Canadian company Afexa Life Sciences Inc.
Valeant Pharma paid 0.85 Canadian dollars for each common share of
Afexa hoping the buy will synergize well with Valeant Pharma's
Canadian OTC franchise. In mid-August 2011, Valeant Pharma
completed the acquisition of Lithuania-based specialty
pharmaceuticals company Kaunas, which is expected to boost Valeant
Pharma's European branded generic portfolio.
In July 2011, Valeant Pharma announced acquisitions that would
entrench its already strong presence in the dermatology market in
the US. Valeant Pharma intends to acquire the assets of Ortho
Dermatologics, a dermatology unit of pharma giant
Johnson & Johnson
(
JNJ
), for $345 million in cash. Valeant Pharma also announced that it
intends to acquire Dermik, a dermatology unit of
Sanofi Aventis
(
SNY
), in the US and Canada. Valeant Pharma intends to close both the
Dermik and Ortho Dermatologics acquisitions by the end of the
year.
Our Recommendation
The stock carries a Zacks #2 Rank (Buy rating) in the short
run.
Valeant Pharma in its current form emerged from the merger of
Biovail and Valeant in September 2010. Overall, we believe
the combined Biovail/Valeant entity is a unique company as it
offers global reach, a diversified revenue base, a favorable tax
structure and limited patent exposure. Moreover, accretive
acquisitions add to the company's investment thesis.
JOHNSON & JOHNS (
JNJ
): Free Stock Analysis Report
SANOFI-AVENTIS (
SNY
): Free Stock Analysis Report
Zacks Investment
Research