Axcan to acquire Eurand

Axcan Pharma Inc. (Mont St. Hilaire, Quebec) will acquire partner Eurand N.V. (NASDAQ:EURX) in a tender offer of $12 per share in cash, or about $583 million. The price is a 9% premium to Eurand's Tuesday close of $10.97, before the deal was announced.

The proposed deal follows the withdrawal of Axcan's exocrine pancreatic insufficiency (EPI) product Ultrase, for which Eurand is eligible for manufacturing fees and royalties. Axcan withdrew Ultrase because it did not receive approval for the product under new FDA guidelines requiring NDA approval for pancreatic enzyme replacement therapies. Last week, FDA issued a complete response letter for Ultrase in which the agency noted that manufacturing issues identified in an inspection must be resolved prior to approval. Sales and royalties from Axcan accounted for 31% of Eurand's 2009 revenue, which was $172.8 million. Eurand also markets EPI product Zenpep pancrelipase. On a conference call, the chairman of a special committee of independent Eurand directors attributed the decision to sell the company in part to the Ultrase setback. ...