Forest Laboratories Inc. (FRX) said it will buy Clinical Data
Inc. (CLDA) for at least $898.7 million, as it looks to capitalize
on Clinical Data's newly approved Viibryd antidepressant drug.
According to terms of the deal, Forest Labs will pay $30 a share
in cash for each Clinical Data share--a 12% discount from their
closing price of $33.90 on Friday. The deal also includes a
contingent consideration of $6 a share based on milestones related
to Viibryd that could boost the price tag on the deal to $1.08
billion.
Shares of Forest Labs plunged 6.8% to $32 in premarket trading
as the company said the deal is expected to hurt its per-share
earnings for the next three fiscal years, with the bottom line
being dinged by 55 cents to 65 cents a share for fiscal 2012.
Forest Labs said the deal may add to its bottom line during fiscal
2014.
Clinical Data shares closed Friday at $33.90 and were inactive
premarket.
Forest Labs noted that the $30-a-share offer is a 6.6% premium
to the average trading price of Clinical Data stock since the first
trading day after it announced the approval of Viibryd.
"We believe that we are uniquely positioned to bring Viibryd to
market in light of our long and successful experience of clinical
development and expertise in the antidepressant market," said
Forest Labs Chairman and Chief Executive Howard Solomon. "This
transaction is consistent with our strategy to acquire new products
that will help offset the loss of revenues due to patent
expiries."
Consolidation has been a theme of the drug-making and developing
industry of late, as companies have been buying each other up in an
attempt to insulate themselves from revenue lost when patents on
drugs expire, allowing much cheaper generic versions of drugs to
hit the market.
The deal has been approved by both companies' boards of
directors and is expected to close in the second quarter.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855; nathan.becker@dowjones.com;