Auxilium Pharmaceuticals Announces Purchase Of Biotech QLT
Auxilium Pharmaceuticals has announced that it will be purchasing biotech firm QLT for an estimated $345 million. The companies will be combined, and the remaining shell of QLT will be named “New Auxilium.” This move sets the company up to attain QLT’s new experimental eye drug products for its portfolio.
QLT primarily produces ophthalmology treatments for inherited retinal diseases. QLT’s leading treatment, synthetic retinoid, is a drug that replaces a key chemical component in the eye that is critical to visual functioning. The diseases treated by synthetic retinoid are caused by genetic mutations that adversely affect the availability of that key component. Adrian Adams, the CEO of Auxilium, released a statement on the acquisition. “Building on Auxilium's strong foundation and commercial expertise, the merger with QLT represents a unique opportunity to accelerate our desired strategic transformation into a leading, diversified North American specialty biopharmaceutical company. We are creating what we believe is a more competitive and efficient platform to capitalize on greater market opportunities and position Auxilium to deliver meaningful value for shareholders while enhancing our ability to invest in and offer innovative products that make a difference in the lives of underserved patients,” he said.
According to Bloomberg, Auxilium Pharmaceuticals also made the deal with a tax inversion in mind; following this acquisition, the Chesterbrook, Pennsylvania based company will be able to be reincorporated in British Colombia, Canada. Tax inversions are fairly typical in the pharmaceutical industry, with drug companies based out of the U.S. regularly looking for inversions to nations such as Canada and Ireland, which have lower corporate tax rates. Canada in particular has been looking to attract more companies in the pharmaceutical industry. Auxilium has stated that the company’s headquarters will remain in Pennsylvania, and there will be no major changes to daily operations.