Breaking News Bar
updated: 5/28/2013 9:58 AM

AstraZeneca to pay about $260M for Omthera Pharma

Success - Article sent! close
Associated Press

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.

Article Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.