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Forest said to be interested in $3bn Aptalis acquisition

Deal would give pharma company ownership of cystic fibrosis and gastrointestinal products
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Forest Laboratories is on the brink of an agreement to buy speciality pharma company Aptalis from its private equity owner in a deal valued at $3bn, according to a Reuters report.

If completed, the deal would give Forest a portfolio of commercialised drugs to treat cystic fibrosis and gastrointestinal disorders such as peptic ulcer disease, as well as a pipeline of new drugs including Aeroquin, an inhaled formulation of the antibiotic levofloxacin for cystic fibrosis.

Aptalis' sales were a little under $700m in the year ended September 30, 2013, and the company posted a net profit of around $87m.

The proposal - attributed by Reuters to someone close to the deal - comes shortly after Forest appointed former Bausch + Lomb head Brenton Saunders as its new chief executive in October. Forest was reportedly in discussions with Aptalis about a deal last year but backed off when former CEO Howard Solomon announced his retirement.

Saunders has already announced a major restructuring of Forest aimed at cutting $500m off its costs and funding acquisitions as it continues to weather the loss of patent protection in the US for former blockbuster antidepressant Lexapro (escitalopram), as well as generic competition from 2015 for Alzheimer's disease therapy Namenda (memantine).

The company is looking to new products such as chronic obstructive pulmonary disease (COPD) therapy Tudorza (aclidinium bromide), launched at the end of 2012, and irritable bowel syndrome drug Linzess (linaclotide) to maintain sales.

With Lexapro and Namenda accounting for more than three quarters of company turnover at their peak it has a big revenue gap to plug, a situation exacerbated by the FDA's decision to delay approval of its schizophrenia candidate cariprazine last November.

Aptalis' current owner TPG failed to find a buyer for the company last year and has started making noises about a possible initial public offering (IPO) as an exit strategy. The private equity group bought Aptalis for $1.3bn in 2008 and was looking to sell it on for $3bn-$4bn.

The Aptalis rumour also comes shortly after Forest itself was the subject of speculation about a possible takeover by AstraZeneca.

Article by
Phil Taylor

8th January 2014

From: Sales

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