Bausch Health on Wednesday announced a deal to purchase nearly all of the assets of bankrupt drugmaker Synergy Pharmaceuticals for about $200 million in cash, with the transaction including the constipation treatment Trulance (plecanatide). Bausch Health CEO Joseph Papa noted that the acquisition "will enhance our Salix Pharmaceuticals business," adding that Trulance is a "natural complement" to the company's irritable bowel syndrome treatment Xifaxan (rifaximin). Papa said "with the scale and strength of our sales footprint in GI and primary care, our Salix team will be able to offer physicians and patients multiple treatment options that span the types of irritable bowel syndrome."
Bausch Health indicated that if its bid, which will not require outside financing, is approved, the transaction is expected to close in the next quarter, although Synergy noted that it will evaluate any competing bids to ensure that it receives the "highest and best offer for its assets." Shares in the Canadian firm, which earlier this year changed its name from Valeant Pharmaceuticals, rose approximately as much as 9 percent on the news.
Synergy has struggled with Trulance's sales since the therapy was cleared by the FDA in January last year. Allergan and Ironwood Pharmaceuticals' competing therapy Linzess (linaclotide) generated around $556 million in revenue over the first nine months of 2018, compared with $31 million for Trulance.
In October, Synergy disclosed that buyout offers received after initiating a strategic review in May have been "significantly below" its market value, adding that it did not expect to obtain any significantly higher offers, while it has also "been unable to consummate any partnership opportunities."
Synergy CEO Troy Hamilton explained "we have now reached a point where our financial challenges are preventing us from taking this important work to the next level." Shares in the company plunged as much as 70 percent on the news.
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