Embattled Vancouver biotech QLT Inc. (TSX:QLT) has taken another huge hit as its US$300 million buy-out from Auxilium Pharmaceuticals (NASDAQ:AUXL) has been abruptly terminated.
The two companies had announced the merger in June , and at the time Auxilium said it would allow the company to move into a considerably lower tax bracket.
QLT will receive a kill fee of US$28.4 million according to the terms of the original merger agreement.QLT chairman Jason Aryeh said the company is going to start reassessing its options immediately.
Auxilium has rejected the deal in favour of a better offer from Endo International plc. (TSX:ENL), a healthcare firm based in Dublin, Ireland. The unsolicited Endo offer came in September, and as recently as September 22, Auxilium had announced that it was not interested in cancelling its deal with QLT.
The last few years have been rough for the Vancouver biotech. At its peak in 2006, the firm had 400 staff members; in July 2012, the company fired more than two-thirds of its staff after a Danish venture capital firm took control of QLT’s board.
By December 2012, the staff count had dwindled to 39.
As of press time, the share price of QLT has not taken an immediate hit from the news; shares were trading at $4.60 – an increase of 1.55% from the day before. However, this price is considerably lower than its high in the previous 30 days of $7.25, which came about a week before Endo’s offer to Auxilium on September 16. The day after the offer was made, QLT’s share price plunged 13.72%.Shares of Endo, as of press time, were trading at $76.00 – down 3.43%.
- With files from Nelson Bennett and Tyler Orton
@EmmaHampelBIV
