Teva to buy Auspex Pharmaceuticals in $3.5 billion deal

Teva Pharmaceutical Industries has agreed to buy Auspex Pharmaceuticals for about $3.5 billion in cash to bolster its business of making drugs to treat disease of the central nervous system.

Teva will begin a tender offer of $101 a share for California-based Auspex, the companies said in a statement today. That’s 42 per cent above Auspex’s closing price on Friday.

The acquisition is part of a deal-making surge in the industry as drugmakers seek new products to reinforce their own pipelines of experimental treatments. Horizon Pharma has agreed to buy Hyperion Therapeutics for $1.1 billion to gain drugs to treat rare metabolic diseases.

Teva chief executive Erez Vigodman said last month that the company seek acquisitions, prompting analysts to speculate on potential targets. As they did, investors bid up Teva's stock to a five-year high, part of what's shaping up to be the biggest monthly rally in more than a year.

Mr Vigodman is seeking deals to offset generic competition to its best-selling multiple-sclerosis drug Copaxone, which analysts estimate account for about half of profits. A US Supreme Court decision delayed the introduction of generic rivals until September.

Executives said during investor meetings in Israel recently that the company has narrowed down its preferred targets to 25 and would consider a "transformative" deal or a string of smaller branded deals, according to a March 26th report from Sanford C. Bernstein and Co.

Bloomberg