Tuesday's announcement from Merck (NYSE: MRK) that is acquiring Inspire Pharmaceuticals (Nasdaq: ISPH) is interesting on a couple of fronts. It's interesting for the multiple that Merck is paying and it is a good exit for Inspire shareholders. It is also interesting because it leaves so few publicly traded stocks in the eye care sector.
A Fair Deal For A Troubled Company
Merck is offering $5 in cash for each share of Inspire Pharmaceuticals, for a total deal value of $430 million. Although this price was a 26% premium to Monday's closing price, it was only half of where the stock was trading as recently as December, and that's a big part of why the company is taking the deal.
Inspire's shares got crushed when the company's drug candidate for cystic fibrosis (denufosol tetrasodium) failed in a Phase 3 study and the company abandoned the program. Add that failure to the prior Phase 3 failure of Prolacria in dry eye and the company was left with a very thin pipeline – a low-potential follow-on indication for AzaSite in blepharitis and some early-stage glaucoma compounds (likely at least six or seven years from marketability).
To read the full piece, please go here:
The Incredible Shrinking Eye Care Sector
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