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Salix Pharma to buy biopharmaceutical Santarus for $2.12B, gaining acid reflux, diabetes drugs

NEW YORK, N.Y. – Salix Pharmaceuticals will buy Santarus for about $2.12 billion to add to its roster of drugs focused on gastrointestinal disorders.

Salix will pay $32 per share for Santarus’ stock, the drugmakers said Thursday, valuing Santarus at $2.6 billion including debt.

The combined company would be on pace for more than $1 billion in annual sales. Salix said it will have a strong position in the gastrointestinal drug market with a more diverse array of products.

Salix Pharmaceuticals Ltd., based in Raleigh, N.C., is paying a 38 per cent premium to Santarus Inc.’s closing price of $23.22 Thursday.

The boards of both companies have approved the deal and say they expect the sale to close during the first quarter.

Salix shares, up 76 per cent in 2013, added another $6.69, or 9.4 per cent to $78 in aftermarket trading, while Santarus stock added 37 per cent to $31.90. Santarus shares had already more than doubled this year.

Salix expects about $920 million in revenue in 2013. Its biggest seller by far is Xifaxan, a treatment for traveller’s diarrhea and neurological problems associated with liver failure. Other products include the ulcerative colitis drug Apriso, and constipation drug Relistor.

San Diego-based Santarus sells Glumetza for diabetes, Zegerid for acid reflux and Uceris for ulcerative colitis. Revenue in the nine months through September more than doubled to about $268 million. In August, it predicted sales of $355 million to $360 million for the year.