Horizon withdraws $1bn Depomed bid
pharmafile | November 20, 2015 | News story | Sales and Marketing |
Horizon Pharma has withdrawn its $1 billion unsolicited offer for Depomed following a block from a California court based on Horizon’s inappropriate use of confidential information, bringing to an end a six-month pursuit.
At a hearing, Judge Peter Kirwan of the Superior Court of California for the County of Santa Clara granted Depomed motion for preliminary injunctive relief against Horizon.
In his ruling, Judge Kirwan did not grant the injunctive relief Horizon Pharma had sought regarding the legality of Depomed’s ‘poison pill’ tactics to inflate the share price, and certain of the bylaw amendments announced by Depomed’s board of directors on July 13, 2015.
Timothy Walbert, chairman, president and chief executive officer, Horizon Pharma says: “While we strongly disagree with the court’s ruling, we are withdrawing our offer to acquire Depomed. Today’s ruling by the court does not affect our 2016 guidance or long-range plan or expectations. We have built a strong and diversified portfolio of medicines that we expect will exceed $750 million in net sales in 2015 and we expect will drive nearly $1 billion in net sales in 2016.
“As we look to the future, we are committed to our strategy of complementing our strong organic growth, which has the potential to double our net sales to approximately $2 billion by 2020, with value enhancing acquisitions. While we are disappointed by the court’s ruling, Depomed was only one of many attractive acquisition opportunities we have been actively pursuing.”
Ireland-based Horizon first made an all-stock offer to buy Depomed in May; steadily increasing the offer after the first was rejected.
However, Depomed’s board constantly maintained that a Horizon takeover was not in the best interest of the company, as it was experiencing a period of significant growth which it expected to benefit from as it acquired rights to pain killer Nucynta from Janssen Pharmaceuticals.
Depomed’s purchase of Nucynta brought to light the rare legal claims issued in the California court. Depomed and Horizon both bid for Nucynta in 2013, signing a confidentiality agreement with Janssen not to use the information during the bidding for any other purpose.
Depomed accused Horizon of improperly using that information to inform its bid.
Horizon’s latest takeover proposal offered 0.95 Horizon share for each Depomed share, which valued the company at $17.88 a share.
Yasmita Kumar
