Alpharma has finally succumbed to the charms of King Pharmaceuticals and has accepted a takeover bid of $1.6 billion.

Under the terms of the deal, King will pay $37 per share in cash to acquire Alpharma, the same price that the latter’s board dismissed as inadequate in September. It represents a 54% premium over its closing price on August 21, the day when King made another approach and put in a $1.4 billion offer.

That persistence has paid off and Alpharma chief executive Dean Mitchell said that “after careful evaluation, our board determined that a combination with King is in the best interest of our shareholders”. Over the past two years, the firm has created “tremendous shareholder value”, he added and the link-up, which has “a compelling strategic logic” provides stockholders “immediate access to this value”.

Some 73% of shares of Alpharma had been tendered as of November 21, the expiration date of the offer from King. That has now been extended to December 19 and King said it expects the deal to close by the end of the year.

The deal creates a firm which will have a strong franchise in powerful pain drugs. King added that the new entity will “enhance the anticipated launches” of Remoxy (long-acting oral oxycodone) and Embeda (morphine sulfate extended-release with sequestered naltrexone), “both of which are designed to resist or deter common methods of opioid misuse and abuse”. Alpharma already markets Kadian (extended-release morphine) and Flector (diclofenac/epolamine) topical patch, while King sells Avinza (extended-release morphine) and observers believe that either the latter or Kadian may have to be divested before the US Federal Trade Commission approves the deal.

If it does go ahead, King expects the transaction will be accretive to earnings per share, excluding any special items, in the second full year following completion. It anticipates achieving synergies of $50-$70 million over the same period.

Lilly completes ImClone purchase
Staying with acquisitions and Eli Lilly has completed its $6 billion acquisition of ImClone Systems.

Lilly chief executive John Lechleiter said that the transaction boosts the firm’s oncology pipeline with up to three promising targeted therapies in Phase III in 2009, and provides it with the opportunity to generate additional value from the cancer blockbuster Erbitux (cetuximab).