Encysive Pharmaceuticals Inc.'s stock skyrocketed Wednesday after Pfizer Inc. said it will buy the biopharmaceutical company for about $195 million to strengthen its high blood pressure product portfolio.
New-York-based drug maker Pfizer, which markets the world's best-selling cholesterol drug Lipitor, will make a $2.35-per-share cash tender offer for Encysive.
Shares of Houston-based Encysive soared $1.20, or 110 percent, to $2.27 in midday trading. In the past year, the stock has ranged between 59 cents and $5.02. Pfizer's stock fell 9 cents to $22.29.
The acquisition would give Pfizer the rights to Thelin, an oral drug approved in several European Union countries, but struggling for approval with U.S. regulators. Pfizer would also add Encysive's other pipeline candidates to its portfolio.
Thelin treats pulmonary arterial hypertension, which refers to high blood pressure in the pulmonary artery.
The deal, if approved, would strengthen Pfizer's position in treatments for the condition, for which it already markets a drug called Revatio, which contains the same active ingredient as Viagra.
Pfizer says it plans a late-stage trial of Thelin in the United States to obtain approval for the drug by the Food and Drug Administration.
However, Thelin has hit several stumbling blocks with the FDA, as the agency has repeatedly denied approval and maintained the drug is not sufficiently effective. In September, Encysive said it would work with the FDA to finish a protocol for a late-stage study of the drug.
Nonetheless, in December, Encysive said it expected sales of its troubled hypertension drug to rise in 2007 and 2008. The company forecast Thelin sales between $10.5 million and $11.5 million in 2007 and between $40 million and $50 million in 2008. The drug had sales of just $300,000 in 2006.
Encysive is scheduled to report its fourth-quarter and fiscal 2007 results on March 5.
Meanwhile, Encysive's board of directors unanimously has approved the agreement and recommended its stockholders accept the offer and tender their shares.
The deal is expected to close in the second quarter.
The buyout news comes after Pfizer last year suffered the loss of patent protection on blood pressure drug Norvasc, one of its key products.