Salix Pharmaceuticals to Acquire Oceana Therapeutics

Salix Pharmaceuticals, Ltd. SLXP +4.19% and Oceana Therapeutics, LLC today announced that they have entered into a definitive agreement whereby Salix will acquire all of the outstanding stock of Oceana Therapeutics, Inc., a privately-held global provider of gastroenterology and urology therapeutics, for $300 million in cash. The transaction is subject to customary conditions to closing, including U.S. anti-trust approval, and is expected to close in December 2011."The acquisition of Oceana expands our product portfolio of innovative products, furthers the diversification of Salix's base business and provides immediate added revenue," stated Carolyn Logan, President and Chief Executive Officer, Salix. "Oceana markets two differentiated products - SOLESTA(R); a first-in-class, biocompatible tissue bulking agent for the treatment of fecal incontinence; and DEFLUX(R), the only FDA-approved alternative to major ureteral reimplantation surgery for the treatment of vesicoureteral reflux."SOLESTA is the only nonsurgical FDA-approved treatment for fecal incontinence in adult patients who fail conservative therapy. Fecal incontinence is a significant unmet medical need that affects approximately 15% of people in the United States over the age of 50, and is the leading reason for admission to assisted living facilities in the United States. For patients who have not responded to conservative therapy, SOLESTA, an injectable gel containing dextranomer microspheres and hyaluronic acid, may serve as a much-welcomed solution that does not involve surgery and can be performed without anesthesia. SOLESTA is a highly synergistic addition to our product portfolio. We believe our specialty sales force, calling on gastroenterologists and colorectal surgeons, should be able to maximize the commercial potential of this asset. SOLESTA was approved by the FDA through the premarket approval process as a Class III Medical Device in May 2011 and launched in September 2011. SOLESTA also is CE Mark-approved and marketed in Europe."DEFLUX is indicated for children affected by vesicoureteral reflux (Grades II-IV), a malformation of the urinary bladder that can result in severe infections of the kidneys and irreversible kidney damage. DEFLUX has been on the market in the United States since 2001. We look forward to adding DEFLUX to the line of products sold by our institutional sales force. DEFLUX also is approved and marketed outside the United States in over 40 countries. Worldwide net sales of DEFLUX through the first nine months of 2011 were approximately $26 million.""This transaction should accelerate Salix's strategic initiatives," stated Adam Derbyshire, Executive Vice President and Chief Financial Officer, Salix. "The addition of SOLESTA and DEFLUX represents an opportunity for Salix to create stockholder value by leveraging its primary asset -- its top-performing specialty sales force. We believe peak-year sales for SOLESTA could exceed $500 million. We expect the transaction to be modestly accretive in 2012 and highly accretive thereafter."Wells Fargo Securities, LLC is acting as exclusive financial advisor to Salix and Covington & Burling LLP is acting as legal counsel to Salix in the transaction. Jefferies & Company, Inc. is acting as exclusive financial advisor to the seller, and Debevoise & Plimpton LLP is acting as legal counsel to the seller in the transaction.