QLT’s plan to merge with Auxilium falls through

Vancouver- based QLT Inc. says it will receive a $ 28.4 US million termination fee as a result of a decision by Auxilium Pharmaceuticals to cancel their friendly merger deal in favour of a superior offer worth about $ 2.6 billion US from an Irish company.

Pennsylvania- based Auxilium had previously agreed in June to merge with QLT, a one- time powerhouse in the Canadian biotech sector that is currently worth about $ 230 million in total.

QLT has lost its prominence since its main product, a treatment for agerelated blindness, lost its market share several years ago as competitive products became available.

QLT said it has been notified by Auxilium that a previously announced offer from Endo International PLC is a better deal.

“We are obviously disappointed that the merger with Auxilium did not complete. In light of this development, we will immediately re- engage in our assessment of all potential strategic options,” said Jason Aryeh, chairman of QLT’s board of directors.

Endo is offering $ 33.25 US per share of Auxilium, to be paid in cash and stock. The offer is 55 per cent above Auxilium’s closing stock price on Sept. 16, the day that Dublin- based Endo announced its offer for the U. S. company.

Under QLT’s proposal, Auxilium shareholders would have received 3.1359 shares of QLT. At the time, QLT shares were worth about $ 5.80 on the Toronto Stock Exchange and $ 5.40 US on Nasdaq. Since then QLT shares have dropped to $ 4.04 US on the U. S. market and $ 4.53 in Toronto — diminishing the value of its offer.