Boston, MA 05/21/2014 (wallstreetpr) – The drug maker Questcor Pharmaceuticals Inc (NASDAQ:QCOR) just got over a major hurdle in its efforts to merge into a fellow drug company. The U.S. Federal Trade Commission announced the termination of the antitrust review of the deal between Questcor and Mallinckrodt PLC (NYSE:MNK). The development gives the companies an opportunity to face their respective shareholders with confidence.
The companies agreed to a tie-up in which Mallinckrodt PLC (NYSE:MNK) will pay $5.6 billion to acquire Questcor. The boards of directors of the two companies have already approved the deal. However, the companies intend to go back to their shareholders for the approval of the transaction according to regulatory requirements. The companies expect to close the transaction in 3Q2014.
Under the deal, shareholders of Questcor will receive 27 percent premium on the price of the company’s shares just before the deal was announced. Therefore, Mallinckrodt will pay $30 per share in cash and top it up with 0.897 of its own shares for every single piece of Questcor held. The companies announced the deal on April 7, 2014.
Shareholder approval
Given that the deal will stand or fall depending on how shareholders from both sides view it, Mallinckrodt and Questcor Pharmaceuticals Inc (NASDAQ:QCOR) are counting on the quick approval of the deal before the U.S. antitrust agency to create goodwill among their shareholders.
Added advantage
The companies believe their proposed tie-up will be an added advantage to their respective shareholders in the drug manufacturing industry. Questcor continues to generate strong sales from its top product Acthar. The injectable gel that helps patients to deal with disorders such as infantile spasms and sclerosis generated $761 million in sales. It contributed 50 percent of the Questcor’s 2012 revenue.
According to CEO Don Bailey, the company will, even after the tie-up, continue to explore new potentials for Acthar with the aim of expanding its treatment score and attracting higher revenue.
Shares of Questcor Pharmaceuticals Inc (NASDAQ:QCOR) have been closing up since the deal was announced, and the shares are up more than 70 percent since the start of 2014.
