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Forest Labs agrees $1.46bn deal to buy Furiex

Gains access to promising IBS drug eluxadoline
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Forest Laboratories has signed a $1.46bn deal to acquire Furiex Pharmaceuticals and bolster its position in gastrointestinal (GI) medicines.

Forest - which is currently in the process of being acquired by generic drug giant Actavis for $25bn - will pay $95 per share for Furiex and gain access to the company's well-regarded lead candidate eluxadoline for diarrhoea-predominant irritable bowel syndrome (IBS).

The initial purchase price is around $1.1bn in cash, with another $360m in the offing assuming eluxadoline fulfils its potential.

Forest chief executive Brent Saunders said the Furiex deal "is a natural extension of our GI business following our $2.9bn acquisition of Aptalis earlier this year," adding that eluxadoline would sit well in its portfolio alongside constipation-predominant IBS drug Linzess (linaclotide).

Eluxadoline is a first-in-class, locally-acting drug that stimulates mu opioid receptors while inhibiting delta opioid receptors. It has been shown in phase III trials to alleviate diarrhoea and pain in this form of IBS, which affects an estimated 28 million people in the US and Europe.

The drug is due to be filed for approval in the US in June and - if approved by the FDA - some analysts are predicting eluxadoline could make annual sales of $750m or more at peak.

Furiex also has a stable of marketed drugs for diabetes including Nesina (alogliptin) and fixed-dose combination therapies Oseni/Liovel (alogliptin/pioglitazone) and Kazan (alogliptin/metformin), which are sold by Takeda, as well as Priligy (dapoxetine) for premature ejaculation.

Rights to these products will be sold on to Royalty Pharma AG for around $415m, helping to offset the Furiex purchase by around $315m, although Forest said the main Furiex deal is not contingent on this agreement going through.

Given its timing, Actavis has presumably given its blessing to the transaction, which still has to be approved by Furiex shareholders as well as antitrust authorities. Gastroenterology is also a focus for the generics company, which is in the process of trying to build up a brand medicines franchise.

Article by
Phil Taylor

29th April 2014

From: Sales

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