More M&A: Forest snags Furiex for $1.1B as Meda stiff-arms Mylan's $9B bid

Pharma's M&A fever may be most obvious among the industry's biggest players--who could overlook Pfizer's ($PFE) admitted interest in a $100 billion AstraZeneca ($AZN) bid?--but smaller companies are making their own bids, transformational and otherwise.

Mylan ($MYL), the U.S.-based generics leader, has made yet another advance at Sweden's Meda, this time with a $9 billion price tag. But once again, Meda rebuffed the offer. Meanwhile, Forest Laboratories ($FRX)--itself pledged to Mylan rival Actavis ($ACT) in a $25 billion deal--said it would pick up Furiex, a small specialty drugmaker, for $1.1 billion.

Furiex has been eyeing a sale since early this year, when it hired Bank of America to shop the company. It markets drugs for diabetes and premature ejaculation, but the major attraction is eluxadoline, a treatment for irritable bowel syndrome now under review for FDA approval.

Word from the agency is expected in June, and the price depends on that nod. Forest says it will pay $95 per share up front, plus up to $30 per share in a contingent value right based on the drug's approval or lack thereof. Not coincidentally, Forest and its partner Ironwood Pharmaceuticals ($IRWD) recently launched a IBS drug, Linzess (linaclotide), focused on constipation symptoms associated with the disorder. So, Furiex would boost Forest's gastrointestinal portfolio--and would do the same for Actavis after the bigger merger closes.

Meda Chairman Bert-Ake Eriksson

While Furiex's shares were up 28% this morning on the deal, Meda's are sliding, thanks to its refusal of Mylan's offer. The Swedish company's stock jumped by 10% Friday, when Mylan raised its bid to 145 crowns ($22.20) per share from 130 crowns; this morning, shares had dropped by 8%. Meda's shareholders have the company's biggest investor to thank: A company controlled by Sweden's prominent Olsson family boasts a 22.7% stake and thus can block any takeover attempt. Meda's chairman, Bert-Ake Eriksson, is also the CEO of the Olsson company, Stena Sessan Rederi.

As Reuters notes, Meda is nevertheless seen as a hot takeover prospect. A new allergy drug, Dymista, has boosted growth, and its strength in emerging markets is a plus for potential buyers looking to diversify geographically. Those advantages are likely to bring a third offer from Mylan, one investment firm said in a research note.

The U.S. company may need to look at Meda's 2015 forecast to formulate an acceptable price, Pareto Securities said; those numbers would justify a 160-crown offer. Plus, the firm said, Mylan needs Meda more than Meda needs Mylan: "Meda is a potential target for many companies," the note stated.

Meda's board insists it's steadfast about staying independent, however. "The board's decision is based on a strong belief in the continued potential of Meda as a stand-alone company," the company said in a statement.

- see the release from Forest
- get the Meda news from Reuters

Special Reports: Pharma's top M&A deals of 2013 - Actavis/Warner Chilcott - Mylan/Agila Specialties | Top 10 generics makers by 2012 revenue - Actavis - Mylan

Suggested Articles

Turns out Procter & Gamble didn’t want Pfizer’s consumer health unit after all. But it did want Merck KGaA’s.

Private equity firm, in exclusive talks with Sanofi, says it'll invest to pump up Zentiva into an "independent European generics leader."

With suitor Takeda circling Shire, the Dublin-based target has pulled off a deal of its own.