Pharma BD Deal Intelligence
A slow-burn deal that landed at the worst possible moment: Valeant paid $15.8B for Salix and its Xifaxan gastrointestinal franchise just as its own debt-fueled roll-up strategy was cresting, leaving the acquisition's promise overshadowed by the acquirer's unraveling.
Valeant comes out a winner after upping its Salix bid to $173 per share, beating rival bidder Endo International in the takeover battle for the…
Valeant acquired Salix for $15.8B.
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Valeant acquired Salix for $15.8B.
$3.5B US GI Specialty Rx Market (2014) · $1.6B Xifaxan Annual Revenue (2015)
IBS-D is a subtype of irritable bowel syndrome characterized by abdominal pain with predominantly loose/watery stools, affecting an estimated ~8-12 million US adults (roughly one-third of the ~25-45M with IBS overall). Xifaxan (rifaximin), a gut-selective non-systemic antibiotic, is FDA-approved for IBS-D in adults, hepatic encephalopathy (reduction in risk of overt HE recurrence), and travelers' diarrhea caused by non-invasive E. coli in patients >=12 years.
The Salix acquisition became part of the broader Valeant controversy over pricing practices. Xifaxan remained a strong performer, but Valeant rebranded as Bausch Health in 2018.
Valeant sweetens bid to $173/share after teaming with Bill Ackman; Endo International withdraws.
Valeant acquires Salix at $173/share after bidding war with Endo. Xifaxan is crown jewel asset.
Pre-close discovery: wholesale inventory far higher than Salix disclosed; 2015 revenue guidance cut.
Xifaxan IBS-D indication drives initial script uptake; Valeant raises 2015 guidance.
Xifaxan slumps due to sales force disruption. Salix revenue drops 5.4% amid lower prices/higher rebates.
Valeant writes down $1.05B goodwill on US businesses including Salix amid accounting scandal.
Salix became emblematic of Valeant failed strategy. Inventory problems, sales force cuts, goodwill writedowns.
| Deal | Year | Value | Outcome |
|---|---|---|---|
| Valeant Pharmaceuticals / Salix Pharmaceuticals (this deal) | 2015 | $15.8B | 39 |
| UCB SA / Celltech Group plc | 2004 | $2.7B | 92 |
| Johnson & Johnson / Centocor Inc. | 1999 | $4.9B | 92 |
| Takeda Pharmaceutical Company Ltd. / Millennium Pharmaceuticals | 2003 | $8.8B | 82 |
| Bristol-Myers Squibb Company / Celgene Corporation | 2019 | $74.0B | 77 |
| Biogen Idec Inc. / Elan Corporation plc (Tysabri rights) | 2013 | $3.2B | 77 |
| Gilead Sciences Inc. / CymaBay Therapeutics | 2024 | $4.4B | 76 |
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