Bausch Health Buys Bankrupt Synergy Pharmaceuticals

Bausch Health Companies Inc. (NYSE: BHC) is back on the acquisition trail. It’s recent target is Synergy Pharmaceuticals Inc., (NASDAQ: SGYP), a New York City-based biopharma focused on novel gastrointestinal (GI) therapies. Its flagship product, Trulance (plecanatide) is a once-daily tablet approved for adults with chronic idiopathic constipation and irritable bowel syndrome with constipation.

Synergy filed for reoganization under Chapter 11 of the U.S. Bankruptcy Code on December 12, 2018 in the Southern District of New York. Bausch was designated the stalking-horse bidder with its offer of approximately $200 million plus certain assumed liabilities.

The auction scheduled for February 26, 2019 did not take place, as no other party submitted higher or better bids. Bausch announced its cash price was $195 million, still with the assumption of “certain liabilities.” The court was set to review the deal on March 1 and the sale would close shortly after that.

Bausch Health, formerly known as Valeant Pharmaceuticals International (formerly NYSE: VRX), was a serial acquirer under former management, racking up several deals a year. Since that management departed the troubled company, new management led by former Perrigo CEO Joseph Papa has spent several months putting the finances back in order before making this bid for Synergy.

Once approved by the court, Bausch plans to integrate Synergy’s assets with its Salix Pharmaceuticals business, a company the previous management acquired in February 2015 for $15.8 billion.

At the time, Salix was a leader in the gastrointestinal market leader with a portfolio of 22 total products. It reported inventory issues in November 2014 and saw management turnover soon after as its share price plunged.

 

 

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