Cubist Pharma To Buy Trius Therapeutics, Optimer For Up To $1.62 Bln

(RTTNews) - Shares of Cubist Pharmaceuticals Inc. (CBST) gained more than 5 percent in extended trades on Tuesday after the biopharmaceutical company announced the acquisition of two smaller rivals for a combined value of up to $1.62 billion. The deals are expected to bolster the company's antibiotic portfolio.

Lexington, Massachusetts-based Cubist has agreed to acquire San Diego, California-based Trius Therapeutics, Inc. (TSRX) for $13.50 per share in cash, or about $707 million on a fully diluted basis.

Cubist also announced a deal to acquire New Jersey-based Optimer Pharmaceuticals, Inc. (OPTR) for $10.75 per share in cash, or about $535 million on a fully diluted basis. In addition to the upfront cash payment, Trius and Optimer stockholders will receive contingent value rights or CVR, if certain milestones are achieved.

The $13.50 per share offer price for Trius represents a 15.3 percent premium to its closing stock price of $11.71 on Tuesday. Shares of Trius gained more than 17 percent in extended trades, while shares of Optimer fell almost 8 percent following the announcements of the deals.

Each Trius stockholder will receive one CVR that will entitle the holder to receive an additional cash payment of up to $2.00 for each share held by them, if certain commercial sales milestones are achieved. The total transaction is valued at up to $818 million on a fully diluted basis.

The CVR will entitle each Trius stockholder to receive $1.00 per share if net sales of tedizolid in the U.S., Canada and Europe are equal to or exceed $125 million in 2016, and up to an additional $1.00 per share, paid on a pro rata basis, for 2016 net sales between $125 million and $135 million.

The boards of directors of both companies have approved the transaction, which is expected to close later this year.

Trius brings to Cubist a highly complementary, late-stage antibiotic candidate, tedizolid phosphate or TR-701, as well as several pre-clinical antibiotic programs. Tedizolid phosphate is an IV and orally administered second generation oxazolidinone in development for the potential treatment of certain Gram-positive infections, including methicillin-resistant Staphylococcus aureus or MRSA.

Trius has partnered with Bayer Pharma AG for the development and commercialization of tedizolid phosphate outside of the U.S., Canada and the European Union.

Trius currently expects to submit a New Drug Application to the U.S. Food and Drug Administration or FDA in the second half of 2013 for tedizolid phosphate, seeking approval for an indication in ABSSSI. In addition, the company plans to submit a Marketing Authorization Application to the European Medicines Agency in the first half of 2014.

Cubist noted that Trius is a tremendous strategic fit with the company and supports its "Building Blocks of Growth" long-range goals while extending its presence in the acute care environment.

Meanwhile, each stockholder of Optimer will receive a CVR that is expected to be publicly traded. The CVR will entitle the holders to receive an additional one-time cash payment of up to $5.00 for each share held by them, if certain net sales of Dificid or fidaxomicin are achieved.

The CVR payment will be $3.00 if cumulative net sales exceed $250 million, $4.00 if cumulative net sales exceed $275 million, and $5.00 if cumulative net sales exceed $300 million. The total transaction is valued at up to $801 million on a fully diluted basis.

The transaction too has been approved by the boards of directors of both companies and is expected to close later in the year.

Cubist noted that the transaction adds complementary antibacterial drug Dificid for Clostridium difficile-associated diarrhea or CDAD and will bolster the company's presence in the acute care hospital market.

Optimer received U.S. Food and Drug Administration approval in May 2011 for Dificid, the first antibacterial drug approved in more than 25 years to treat CDAD in adults 18 years of age or older.

Dificid was launched in the U.S. in July 2011. In April 2011, Cubist and Optimer entered into a two-year agreement under which Cubist has been co-promoting Dificid to physicians, hospitals, and other healthcare institutions in the U.S. Concurrently with the merger agreement, the companies have agreed to extend the co-promotion agreement for up to one year.

Optimer will report its complete unaudited financial results for the second quarter ended June 30, 2013, on August 1, 2013. However, the company said its previously scheduled second-quarter financial results conference call for August 1 has been cancelled.

Optimer's net loss for the second quarter was $26.9 million or $0.55 per share. Total revenues for the quarter were $20.1 million. Dificid net product sales in the US and Canada were $19.0 million in the quarter, up from $15.2 million in the prior-year period.

CBST closed Tuesday's regular trading session at $57.00, up $1.04 or 1.86 percent on a volume of 843,246 shares. In after-hours, the stock further gained $3.27 or 5.74 percent to $60.27.

TSRX closed Tuesday's regular trading at $11.71, up $0.26 or 2.27 percent on a volume of 1.30 million shares. In after-hours, the stock further gained $2.04 or 17.42 percent to $13.75.

OPTR closed the regular trading session at $13.29, down $0.15 or 1.12 percent on a volume of 2.14 million shares, and further declined $1.04 or 7.83 percent to $12.25 in extended trades.