Valeant Pharmaceuticals International, Inc.
(
VRX
) recently announced that it has entered into an agreement with
privately-held equity firm Water Street Healthcare Partners to
acquire a US-based specialty oral health company, OraPharma.
As per the terms of the agreement, Valeant will pay
approximately $312 million. Additionally, the company might be
obligated to pay milestone payments of $114 million. The deal is
expected to close by the end of this month subject to certain
regulatory conditions.
OraPharma's portfolio boasts of Arestin (minocycline
hydrochloride) indicated as an add-on therapy for scaling and root
planing (SRP) procedures for the reduction of pocket depth in
patients with adult periodontitis. Arestin can also be used as an
adjunct to a periodontal maintenance program, which includes good
oral hygiene and SRP.
OraPharma reported revenues of approximately $95 million,
demonstrating a high single-digit growth rate from the year-ago
figure, for the 12 months ended March 2012. In the US dental
industry, OraPharma currently has the largest specialized
pharmaceutical sales force. We expect the deal to be accretive for
Valeant Pharma.
We note that Valeant Pharma is on an acquisition spree to expand
its business. Last month, the company announced that it has entered
into agreements to acquire certain assets from both University
Medical Pharmaceuticals and Swiss Herbal Remedies Limited.
In April 2012, Valeant Pharma had purchased US-based,
privately-owned specialty pharmaceutical company, Pedinol
Pharmacal, Inc. and certain branded generic assets from Mexican
pharmaceutical company, Atlantis Pharma.
In March 2012, Valeant Pharma inked a deal to purchase Russian
specialty pharmaceutical company Natur Produkt. During the same
month, Valeant Pharma signed a couple more deals. The company inked
a deal to acquire certain branded generic assets from an Austrian
pharmaceutical company, Gerot Lannach. Furthermore, Valeant Pharma
bought a 19.9% stake in a Brazilian biotech company, Pele Nova
Biotecnologia S.A.
We remind investors that in 2012, Valeant Pharma had kicked off
its acquisition spree with Brazilian sports nutrition and food
supplements company Probiotica Laboratorios Ltd.
Our Recommendation
We currently have a Neutral long-term recommendation on Valeant
Pharma. The stock carries a Zacks #1 Rank (Strong Buy rating) in
the short run.
(VRX): ETF Research Reports
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