Salix Pharmaceuticals to Acquire Oceana Therapeutics for $300 Million

Oceana Therapeutics LLC, a privately owned global company focused on commercializing best-in-class specialty therapeutics, recently announced it has entered into a definitive agreement for the sale of its operating subsidiary, Oceana Therapeutics, Inc. to Salix Pharmaceuticals, Ltd. of Raleigh, NC. The all-cash transaction valued at $300 million has been approved by the Board of Directors of each company and is subject to routine closing conditions, including Hart-Scott-Rodino antitrust approval, and is expected to close before year-end 2011.

“After conducting a thorough review of our strategic objectives, the Oceana management team concluded that this sale creates compelling value for all parties, including investors in both companies as well as the physicians and patients expected to benefit from the combination of Oceana’s commercial assets, Deflux and Solesta, with Salix’s strengths in gastroenterology treatments, said Gregory Stokes, Oceana’s EVP, Business Development.

Deflux is approved in the US, Europe, and elsewhere for the treatment of vesicoureteral reflux (VUR), an anatomical bladder defect afflicting children. It is the only bulking agent approved by the FDA for the endoscopic pediatric treatment of VUR, grades II-IV. Solesta is a biocompatible tissue-bulking agent developed as a nonsurgical treatment for fecal incontinence (FI) that can be administered in outpatient procedure taking approximately 10 minutes without the need for anesthesia. Solesta was approved by the FDA in May of this year for the treatment of FI in adult patients who fail conservative therapy.

Led by John T. Spitznagel, Oceana’s Chairman & CEO, and David S. Tierney, MD, President & COO, Oceana was founded in mid-2008 and reunited a veteran team of healthcare professionals, many who pioneered the Buy & Build, Search & Develop specialty pharmaceutical model of selectively identifying, acquiring, and developing novel prescription drugs and drug candidates.

“At Oceana, we broke new ground by greatly expanding the Buy & Build, Search & Develop model to encompass a broader range of products, including specialty medical devices as well as pharmaceuticals.” said Mr. Spitznagel. “We also broadened our sights to pursue international product opportunities, and as early as mid-2009, within a year of start-up, Oceana was generating a revenue stream through the worldwide sales of Deflux.”

“Today, Oceana is truly a global company with a sales and distribution network encompassing dozens of countries,” added Dr. Tierney. “Both John and I recognize and applaud the contributions and excellence of the entire Oceana team who have driven our company’s rapid growth and success.”

Mr. Spitznagel and Dr. Tierney first collaborated in the second half of the 1990s when they joined Roberts Pharmaceutical and spearheaded a turnaround in Roberts’ earnings into rapid growth, which, in turn, led to that company’s purchase by Shire plc in December 1999. Collectively, over the past decade, the Oceana management team has built substantial value in other specialty healthcare companies, including: ESP Pharma, acquired by PDL BioPharma; Esprit Pharma, merged into Allergan; and Valera Pharmaceuticals, now part of Endo Pharmaceuticals.