EmailGeneral Commentary: This morning Valeant Pharmaceuticals (VRX) announced the acquisition of Medicis Pharmaceutical (MRX) for $44 per share in cash. The transaction values Medicis' common stock at ~$2.6 billion. Medicis portfolio includes prescription brands SOLODYN, RESTYLANE, PERLANE, ZIANA, DYSPORT and ZYCLARA. The pro forma net revenue for the combined company's dermatology and aesthetics businesses for 2012 is expected to exceed $1.7 billion within the United States. Valeant expects the transaction, once completed, to be immediately accretive to Valeant's cash earnings per share. The combination is expected to yield cost synergies at an annual run rate of at least $225 million within six months of closing. Medicis stock is up 38% and Valeant is up approximately 15%.
Gainers on news:
- Medicis Pharmaceutical (MRX +37.99%) To be acquired by Valeant Pharma (VRX) for $44 per share
- Valeant Pharmaceuticals (VRX +14.73%) Announced acquisition of Medicis Pharmaceutical (MRX) for ~$2.6 bln; expected to achieve synergies of ~$225 mln within 6 months
- StemCells (STEM +9.45%) Reported positive interim data from spinal cord injury trial: considerable gains in sensory function for two of three patients
Decliners on news:
- Zalicus USA (ZLCS -10.14%) Announced initiation of the first of two Phase 2a studies with Z160 for the treatment of chronic neuropathic pain
- Codexis (CDXS -2.69%) Announced a workforce reduction of ~133 employees as part of its efforts to conserve cash for its ongoing and future programs following the termination of the Shell Research Agreement and the corresponding loss of ongoing funding for full-time employee equivalents under the Shell Research Agreement
Gainers on earnings:
- No notable gainers on earnings
Decliners on earnings:
- Acadia Healthcare (ACH -3.42%) Acquired Timerline Knolls, a 122-bed inpatient behavioral healthcare facility; expected to be accretive to 2012 EPS by $0.04-0.05
Upgrades/Downgrades:
- Medivation (MDVN +7.16%) Target raised to $125 from $120 at Brean Murray as a result of enzalutamide (trade name XTANDI) approval
- Humana (HUM -0.29%) Upgraded to Outperform from Market Perform at Leerink Swann
- Ironwood Pharmaceuticals (IRWD -1.84%) Noted that approval of linaclotide in Europe is expected in September or October 2012 and would result in an additional milestone payment; also said it expects sales to begin slow but eventually gain strength
- Myriad Genetics (MYGN -2.20%) Noted that there is reimbursement risk for the company's molecular tests including BRACAnalysis and Colaris
