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NEW YORK, Feb 20 (Reuters) - Pfizer Inc PFE.N on Wednesday said it has agreed to pay about $195 million to acquire Encysive Pharmaceuticals Inc ENCY.O and its Thelin lung-disorder medicine that has repeatedly failed to win U.S. approval.
Pfizer, which badly needs new medicines to offset sales declines for its drugs facing generic competition, said it will make a cash offer for all Encysive shares at $2.35 apiece, for an equity value of $195 million. That is more than double Encysive’s closing share price on Tuesday of $1.08.
Pfizer said it has also agreed to assume Encysive’s change of control repurchase obligations under its 2.5 percent convertible senior notes.
The U.S. Food and Drug Administration has issued three approvable letters for Thelin, which is used to treat pulmonary arterial hypertension, without allowing it to come to market.
The often-fatal condition is characterized by very high blood pressure in the arteries between the lungs and heart and is estimated to affect about 100,000 people in North America and Europe.
“Pfizer plans to conduct a pivotal Phase III trial to support registration in the U.S.” of Thelin, Pfizer said in its release, noting that the drug is already approved in the European Union, Australia and Canada.
Thelin is a once-daily pill that works through a different mechanism than Pfizer’s own approved Revatio treatment for pulmonary arterial hypertension.
The Encysive drug blocks receptors to the protein endothelin that causes a tightening of blood vessels.
Revatio, which has the same active ingredient as Pfizer’s widely used Viagra anti-impotence treatment, relaxes smooth muscle cells lining blood vessels and thereby improves blood flow to particular areas of the body.
“The acquisition of Encysive will add growing, near-term revenue from the European market and increase our already strong presence in the cardio-respiratory arena with a product that complements Revatio,” said Ian Read, Pfizer’s president of pharmaceutical operations.
Shares of Swiss drugmaker Actelion ATLN.VX, whose marketed Tracleer drug is a rival treatment for the lung condition, fell as much as much as 3.3 percent after Pfizer announced its intention to buy Encysive.
“Actelion is coming off on this because (the) market was speculating Pfizer could bid for Actelion and one might see Pfizer’s marketing power as a threat to Tracleer,” one trader said.
Pfizer shares were little changed in morning trading on the New York Stock Exchange, amid a moderate downturn for the drug sector. Encysive shares soared 110 percent, or $1.19, to $2.27, on the Nasdaq. (Additional reporting by Sam Cage in Zurich; Editing by Maureen Bavdek)
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