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Sun Pharma bids to acquire InSite Vision Inc

Economic Times:  September, 2015

Mumbai: Dilip Shanghvi-led Sun Pharma has bid to acquire US-based eye care company InSite Vision Inc., as its expands its basket of specialty products to boost sales. The deal may be valued at around Rs. 300 crore representing $0.35 per share for each InSite Vision share on the local US OTC stock exchange. InSite's 2014 full year revenues stood at close to Rs. 55 crore.

Earlier in August, InSite Vision announced a definite agreement with Canadian drug maker QLT, which pegged its value between a band of $0.25 and 0.30 per share. The agreement however had a built in clause that allowed wiggle room for discussions for any higher subsequent bidder. Sun is learned to have outbid QLT with a price of $0.35 per share.

A Sept. 4 disclosure from QLT to the stock exchanges noted it received an unsolicited offer from a global pharmaceutical company that constituted a "Company Superior Proposal."

Investment banking sources say the deal with Sun is predicated on the final withdrawal of the bid from QLT and a payment of termination fee of $ 2667000.

As per the disclosure by InSite Vision, the unnamed bidder has agreed to pay the charges if the discussions with QLT do not reach a conclusive end. The last date for the "negotiation period" was Sept. 10, which analysts believe paves the way for Sun to step in and acquire the firm.

Sun Pharma and InSite Vision did not respond to queries from ET till press time.

InSite Vision is a developer of specialty ophthalmology drugs and has a pipeline of eight clinical candidates in various stages. Its marketed products include Azasite, an antibiotic azithromycin used for bacterial conjunctivitis and Besivance, another antibiotic for infections in the eye. Reports suggest the company expects New Drug Approvals from the US FDA for its two drugs BromSite, DexaSite in the medium term.

"Shanghvi has been keen on expanding the ophthalmic segment for which inorganic route is more viable" added an analyst from an Indian brokerage.

Sun has consecutively struck global deals that reflect its intentions to ensure sustainable revenues for branded or differentiated drugs. In March Sun said it acquired GSK's opiates business in Australia for an undisclosed amount.