Sinclair IS Pharma Plc (SPH.L) said it bought the global rights to dermal gel brand Perfectha, in a deal that is expected to significantly add to earnings, sending its shares up as much as 9 percent.
The specialty pharmaceutical company said it bought the rights to Perfectha through the acquisition of dermatology firm Obvieline Laboratories SA.
Sinclair, which focuses on dermatology, wound care and skin care, said the Perfectha brand includes five gel products that reduce facial folds, lines and wrinkles.
The company said it also entered into an agreement to buy distribution rights mainly in Brazil and Russia from Obvieline's parent company, Pharmavital SA, for up to 32.2 million euros ($43.93 million) in cash with an initial payment of 10 million euros.
"We think it (the deal) also potentially makes the company a more attractive acquisition target for those wanting to build a presence within the aesthetic dermal market," Investec Securities analyst Nicholas Keher said in a note. The brokerage upgraded the stock to "buy" from "hold" and raised its target price to 38 pence.
The acquisition would be funded through a new debt facility.
Sinclair shares were up about 8 percent at 30.7 pence at 0920 GMT, making the stock one of the top percentage gainers on the London Stock Exchange.
($1 = 0.7330 euros)
(Reporting by Karen Rebelo in Bangalore; Editing by Supriya Kurane)