Last week, Horizon ($HZNP) raised its buyout offer for California's Depomed ($DEPO) in order to spur the drugmaker into coming to the bargaining table. But it looks like it'll have to go with Plan B.
Depomed Wednesday shot down the Irish pharma, dismissing its $33-per-share proposal as "inadequate" and not in its shareholders' best interests.
The reason? The new offer isn't actually any better than the $29.25-per-share offer Horizon put forth in May, it argued. It doesn't reflect an increase in the stake Depomed shareholders would have in a combined company, nor the amount of Horizon stock they would pick up.
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| Depomed CEO Jim Schoeneck outside the JP Morgan Healthcare Conference |
"We believe the July 21 proposal is opportunistic and takes advantage of a temporary decrease in Depomed's stock price," Depomed CEO Jim Schoeneck wrote to Horizon chief Timothy Walbert in a letter.
And even with that aside, Depomed's pretty confident in its standalone prospects. As Schoeneck said in a statement, it's on track to become one of the top 5 pain drugmakers in the U.S. by 2016, based on branded revenue. And in the letter to Walbert, he cited updated sales guidance--the midpoint of which pegs the company's compounded annual growth rate at 129% between 2012 and 2015.
Depomed's tune hasn't changed since Horizon first took its interest public back in May. Earlier this month, it swallowed a poison pill to stop any person or group from acquiring a stake in the company greater than 10%.
But Horizon's hasn't changed, either, and it's stressed that Depomed's resistance won't keep it from pushing ahead with a deal. "Horizon remains committed to an acquisition of Depomed and we are prepared to consider all paths necessary to complete the transaction," Walbert said in a statement last week.
- read Depomed's release
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