(Reuters) - Generic drugmaker Actavis Plc ACT.N said it would acquire Durata Therapeutics Inc DRTX.O in a deal valued at about $675 million to bolster its infectious disease portfolio.
Durata’s shares were trading up 77 percent at $24.55 premarket, above Actavis’ offer of $23 per share in cash.
Actavis will pay up to an additional $5 per share if Durata’s lead drug, dalvance, achieves certain milestones, the companies said.
Dalvance is designed to treat acute bacterial skin and skin structure infections, or ABSSSI, which affect the deep tissue or are associated with an underlying disease such as diabetes.
The European Medicines Agency is expected to announce its decision on a marketing authorization application for dalvance, known generically as dalbavancin, in the first half of 2015.
Actavis, which anticipates closing the deal in late 2014 or early 2015, expects the deal to add to earnings by the end of the first year.
Dublin-based Actavis, whose biggest competitors include Teva Pharmaceuticals Industries (TEVA.TA) and Mylan (MYL.O), has been acquiring specialty branded drug makers to boost profit margins and sales.
Salix Pharmaceuticals Ltd SLXP.O had reportedly been in contact with Actavis about a potential sale.
Salix’s shares were down 1 percent at $150.90 premarket on Monday. Actavis stock was inactive premarket.
BofA Merrill Lynch is Durata’s financial adviser and Wilmer Cutler Pickering Hale and Dorr LLP is its legal adviser. Actavis’ legal adviser is Debevoise & Plimpton LLP.
Reporting by Ankur Banerjee in Bangalore; Editing by Sriraj Kalluvila and Savio D'Souza