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Investors eagerly await updates on the pipelines of pharma/biotech companies. However, in the case of Santarus, Inc. , more than the pipeline updates investors will be interested in the company’s upcoming acquisition by Salix Pharmaceuticals Ltd.

We note that Santarus has been actively developing its pipeline of late. Earlier this week, Santarus initiated a phase IIb study (n=90) on its pipeline candidate, SAN-300. The multicenter, multinational, randomized, double-blind, placebo-controlled, multiple ascending dose study will be evaluating the safety and tolerability of repeat subcutaneous (SC) doses of SAN-300 in patients suffering from active rheumatoid arthritis (RA) with inadequate response to disease-modifying anti-rheumatic drugs (DMARDs).

Additionally, Santarus will be evaluating the pharmacokinetics and pharmacodynamics of the candidate in RA patients. The company will also assess the preliminary efficacy and immunogenicity of SAN-300 in these patients. However, competition is stiff in the RA market given the presence of treatments like UCB’s Cimzia and AbbVie Inc.’s (ABBV - Analyst Report) Humira, among others.

We remind investors that Santarus was in the news recently when Salix announced its intention to acquire the prior. In Nov 2013, the companies signed a definitive merger agreement under which Salix will acquire all the outstanding common stock of Santarus for $32.00 per share in cash (without interest). This represents a 36% premium to Santarus’ closing price on Nov 6. The deal, valued at approximately $2.6 billion, is slated to close in the first quarter of 2014. We expect investor focus to remain on the news.

Santarus, a biopharmaceutical company, carries a Zacks Rank #1 (Strong Buy). Some other stocks in the biopharmaceutical sector that are worth considering include Jazz Pharmaceuticals (JAZZ - Analyst Report) and Vanda Pharmaceuticals Inc. (VNDA - Snapshot Report). Both the stocks carry same rank as Santarus.

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