NEW YORK (AP) -- Merck & Co. said Tuesday it is buying Inspire Pharmaceuticals Inc. for about $430 million in a move to expand its product portfolio with treatments for eye conditions.
Inspire's key product is Azasite, which is a treatment for pinkeye cause by bacteria.
Merck, which is based in Whitehouse Station. New Jersey, agreed to pay $5 per share, a 26 percent premium to Inspire's closing price on Monday.
Shares of Inspire jumped 98 cents, or 24.6 percent, to $4.96 in morning trading, signaling that investors approve of the deal.
Inspire's board recommended that its shareholders tender their shares in the deal. Warburg Pincus Private Equity IX L.P., which owns about 28 percent of the outstanding shares of Raleigh, North Carolina-based Inspire, intends to tender its shares.
Azasite had $13.2 million in revenue during the fourth quarter. Inspire also makes the dry-eye treatment Restasis, which is sold by Allergan, and Elestat, which treats itchiness caused by allergy-related pinkeye.
The company had overall revenue of $30.2 million during the fourth quarter. In January, it said it would cut 65 jobs, or 27 percent of its work force, and concentrate on eye care drugs after the failure of an experimental cystic fibrosis treatment. The move followed the failure of denufosol in a late-stage clinical trial. Denusofol was designed to treat cystic fibrosis, a genetic condition that causes thick mucus buildup in the lungs.
Shares of Merck fell 13 cents to $33.14 in morning trading.