British drugmaker AstraZeneca PLC plans to spend about $260 million on Omthera Pharmaceuticals Inc., a specialty drug developer with only 14 employees but has a potential treatment for patients who have high levels of fats called triglycerides in their blood.
AstraZeneca said Tuesday it will pay $12.70 for each share of Omthera, which priced an initial public offering last month at $8 per share. The offered price represents an 87 percent premium to its closing price Friday of $6.77.
The price of Omthera shares nearly doubled, climbing $6.48 to $13.25, in Tuesday morning trading.
AstraZeneca said the deal totals about $323 million when counting Omthera's cash balances.
Omthera shareholders also could receive additional payments totaling about $120 million if the potential treatment called Epanova reaches development milestones. Those contingent value rights add up to about $4.70 per share
Omthera, based in Princeton, N.J., has completed late-stage testing on Epanova, a fish oil-based treatment. It plans to submit the drug, which is a coated, soft gelatin capsule, to U.S. regulators for approval by the middle of this year.
Its shares closed at $7.43 on April 11, the stock's first day of trading, and had remained below the IPO price until Tuesday morning.
Omthera also said Tuesday its first quarter loss narrowed to $7.3 million, or $3.08 per share, in the quarter that ended March 31. That counts preferred dividend payments and compares to a loss of about $10.1 million, or $6.18 per share, in last year's quarter. The company said its research and development expenses fell to $357,000 compared to about $8 million due to the completion of late-stage research on Epanova.
The drug developer listed no revenue in a brief statement on the quarter.
AstraZeneca said last month that its first-quarter profit fell 31 percent as generic competition for bipolar medication Seroquel IR, high blood pressure drug Atacand and cholesterol drug Crestor drove revenue down.
U.S.-traded shares of AstraZeneca rose $1.03, or 2 percent, to $53.20 in morning trading Tuesday.