Target: Medicis Pharma
Buyer: Valeant Pharmaceuticals
Price: $2.6 billion
Closed: Dec. 11, 2012
Valeant Pharmaceuticals' ($VRX) buyout of Medicis was just one in a string of dozens the Canadian company has pulled off, although one of its largest. Valeant CEO J. Michael Pearson calls dermatology Valeant's most important business, and with the Medicis deal it leapfrogs the drugmaker to No. 1 from No. 3 in the category. The group should generate about $2.5 billion in annual sales for the company.
The $2.6 billion paid represented a 39% premium. Pearson brushed off some analyst concerns that the price was unreasonable given that acne drug Solodyn generated 40% of Medicis' annual sales, makes up about 75% of its earnings and may be fading.
With Medicis, Valeant also got the Botox competitor Dysport, and Restylane, a wrinkle-filler that competes with Allergan's ($AGN) Juvéderm. The company likes the fact that because dermatology buys tend to be out-of-pocket for patients, they're not as vulnerable to government budget-cutting (though they can be vulnerable to a sluggish economy).