Forest Labs to buy Clinical Data for $1.2 billion including contingent payments

Drugmaker Forest Laboratories (NYSE: FRX) has entered a deal to acquire fellow USA-based Clinical Data (Nasdaq: CLDA) in a deal worth as much as $1.2 billion that should also bring the former a key antidepressant drug to replace its blockbuster drug Lexapro (escitalopram), which loses patent protection next year.

The deal involves $30.00 per share in cash plus contingent consideration of up to $6.00 per share that may be paid upon achievement of certain commercial milestones related to the antidepressant Viibryd (vilazodone HCL tablets), which Clinical Data has licensed from Germany’s Merck KGaA and was approved by the US Food and Drug Administration last month (The Pharma Letter January 24).

The upfront consideration of $30.00 per share represents a 6.6% premium to the volume-weighted average trading price of CLDA stock since the first trading day after the company announced the approval of Viibryd and that it was considering a potential change of control transaction and a 19.2% premium of the closing price on that day and totals $1.2 billion on a fully diluted basis, net of net cash acquired. Forest will finance the transaction with existing cash. The transaction was approved by the boards of both companies and is expected to be completed in the second quarter of 2011, subject to customary closing conditions.