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Bausch & Lomb To Buy Ista Pharma For $500M

Tue, 03/27/2012 - 9:13am

NEW YORK (AP) -- Eye-health company Bausch & Lomb plans to buy eye-drug maker Ista Pharmaceuticals Inc. for $9.10 per share, or about $500 million in cash, the companies said Monday.

The boards of directors of both companies have approved the deal, and the expect it to close during the second quarter. The offer comes at a premium of 8.6 percent to the stock's Monday closing price of $8.38.

The purchase price includes warrants and a small amount of Ista debt.

Ista, of Irvine, Calif., gets most of its revenue from Bromday, a once-per-day eye drop for patients recovering from cataract surgery. It also makes Bepreve, which is used to treat itching associated with allergic conjunctivitis. The company is also planning to file for marketing approval of a lower-concentration Bromday. Ista wants to market that product under the name Prolensa as a treatment for postoperative inflammation and eye pain after cataract surgery.

Bausch & Lomb, which makes nearly all of Ista's current U.S. products, expects the transaction to add to its profit. The Rochester, N.Y., company is privately held.

CEO Brent Saunders said in an interview that Bausch & Lomb is looking at a number of avenues to keep growing.

"We're going to continue to look at acquisitions as well as internal product development as well as licensing deals."

The sale comes a few months after Ista fended off a bid from Canadian drugmaker Valeant Pharmaceuticals International Inc. Valeant offered to buy Ista for $314 million, or $6.50 per share, in October, and it took that offer public Dec. 16 after Ista rejected the offer. Ista stock had closed at $3.89 per share on Dec. 15. In January Valeant raised its bid to $360 million, or $7.50 per share.

Ista, which had adopted a "poison pill" stockholder rights plan, said it would consider the new offer but that a number of other parties were interested in strategic deals. Valeant withdrew that offer on Jan. 30.

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