Pfizer has hit the M&A path once again and is acquiring Encysive Pharmaceuticals for around $195 million, a significant premium on the latter’s share price.

The New York-based giant is to make a cash offer of $2.35 per share to get hold of Encysive, which represents a 118% premium on the Texas-based firm’s closing price on Tuesday. The latter’s board has unanimously accepted the bid, which is hardly a surprise seeing as the firm has been weighing up its strategic options since July last year.

The reason for that review, and the attraction of the firm for Pfizer, centres around Thelin (sitaxsentan sodium) for the treatment of pulmonary arterial hypertension. In June 2007, the US Food and Drug Administration issued a third approvable letter for the PAH treatment, saying that Encysive's development programme did not demonstrate the evidence of effectiveness needed for approval.

Though Encysive was clearly disappointed with that decision, the firm said that it was sticking by the product and was determined to conduct an additional Phase III trial of the drug to finally get it onto the US market. However, Pfizer will now take on that all-important late-stage trial.

Thelin is on the market in most of the countries of the European Union, Australia and Canada and sales can only benefit from having Pfizer’s marketing muscle behind it. George Cole, Encysive’s chief executive, noted that following the process initiated in July 2007 to review its options, the board of directors concluded that “this cash transaction with Pfizer represents the best option for our shareholders now”.

He added that Pfizer has come with a superior offer and “with an in-depth understanding of PAH”. Indeed, Pfizer already markets Revatio (sildenafil), the same active ingredient as Viagra, for PAH, so the acquisition increases “our already strong presence in the cardio-respiratory arena”, said Ian Read, president of Pfizer’s worldwide pharmaceutical operations. “We look forward to applying Pfizer’s significant resources to the launch of Thelin in additional countries,” he added.

PAH is a progressive, incurable disease that is estimated to affect 100,000 to 200,000 people in North America and Europe. Though relatively rare, it is more common among women aged 20 to 40.