Valeant ups its bid for ISTA Pharma

California, USA-based ophthalmology and allergy drug company ISTA Pharmaceuticals (Nasdaq: ISTA) says that, following a recent meeting with top executives of Canada’s Valeant Pharmaceuticals (TSK: VRX), it has received a revised non-binding proposal from Valeant to acquire ISTA and will consider this as part of its ongoing review of strategic options.

Last month, Valeant made a hostile bid to buy ISTA with an offer price of $6.50 per share, or around $314 million in total (an enterprise value of $327 million including the assumption of $13 million of debt), which ISTA said was “grossly inadequate” (The Pharma Letter December 19, 2011). During the meeting, Valeant raised its initial proposal to $7.50 per share in cash and set a target price of $8.50 per share in cash, subject to one week of due diligence.

Subsequently, on January 16, Valeant sent ISTA a letter confirming its increased non-binding proposal, which included a number of inaccuracies about ISTA's process and the discussions between the two companies, the US firm said. ISTA's process for review of strategic options is advancing as planned and in an expeditious manner, consistent with the board's fiduciary responsibilities and its commitment to maximizing shareholder value.