TORONTO (Reuters) - Valeant Pharmaceuticals International Inc VRX.TO VRX.N is signaling its intent to become a major skincare company with a string of mid-sized acquisitions in the sector.
The specialty drugmaker said on Friday it will pay $345 million to buy the ortho dermatologics unit of Johnson & Johnson-owned (JNJ.N) Janssen Pharmaceuticals.
The news sent the Valeant’s shares up 4.4 percent.
Both the deals announced this week — the other being the planned $425 million acquisition of Sanofi’s (SASY.PA) Dermik skincare business — have been purchases from large pharmaceutical companies eager to offload non-core assets.
Mississauga, Ontario-based Valeant, which focuses on the neurology and dermatology markets, expects the acquisition to add to its earnings in 2011.
“They’re out there buying assets for cash flow and building a broad dermatology presence. It seems like a pretty sound strategy to me,” Stifel Nicolaus analyst Annabel Samimy said.
“The assets that they’re buying are not necessarily the ones that require a significant amount of promotion or expense behind them,” she added.
Revenue for the product portfolio, which includes prescription brands Retin-A Micro, Ertaczo and Renova, was about $150 million in 2010.
Since it dropped its $5.7 billion bid for U.S. drugmaker Cephalon Inc CEPH.O in May, there has been speculation that Valeant would go after other large targets. In the same month, the company said it would buy Lithuanian group Sanitas SAN1L.VL for about 314 million euros ($443 million).
Valeant’s shares were trading up 4.4 percent at 52.80 in Toronto, and up 4.1 percent at $54.79 in New York.
Reporting by S. John Tilak in Toronto and Savio D'Souza in Bangalore