Salix Pharmaceuticals (NASDAQ: SLXP )
has long been a solid, if volatile, specialty pharmaceutical company.
Salix has long relied upon its rifamycin-based drug Xifaxan for a
significant percentage of its revenue (almost two-thirds as of the most
recent quarter), while hoping that other approved products like Apriso
and Solesta and pipeline drugs like Relistor (for opiod-induced
constipation) could add both growth and diversity.
Now the company has taken a significant step forward in diversifying
its revenue base and leveraging its balance sheet. Last week, Salix
announced an agreement to acquire Santarus (NASDAQ: SNTS )
for $2.6 billion in cash. The deal may look expensive at more than
seven times estimated 2013 sales, but the collection of assets that
Salix is acquiring should deliver above-average growth with strong
synergies with Salix's existing business.
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Salix Scores Santarus in a Savvy Deal
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