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Medicis, Revance Settle Litigation
Privately owned specialty biopharmaceutical company, Revance Therapeutics, Inc. recently announced the termination of its agreements with
Medicis Pharmaceutical Corporation related to RT001 (botulinum toxin type A topical gel) and RT002 (injectable botulinum toxin type A). Both companies also settled their outstanding litigation.
As per the settlement agreement, Medicis will return worldwide rights to Revance for developing and marketing both RT001 and RT002 for all indications. In return, Medicis will receive an upfront payment of $7 million and up to an additional $18 million from Revance on the achievement of certain events.
The companies will terminate the RT001 option agreement and the RT002 licensing agreement entered in July 2009. However, Medicis will continue to own its current stake in Revance.
We note that in September 2012, Valeant Pharmaceuticals International, Inc. ( VRX - Analyst Report) had announced that it has entered into an agreement with Medicis to acquire the latter for $44.00 per share in cash. The deal value is estimated to be approximately $2.6 billion. The transaction is expected to be completed in the first half of 2013.
The Medicis acquisition price represents a 39% premium over the closing price of last trading day (August 31, 2012) before the announcement. The news was viewed positively by investors. The share price of both Valeant and Medicis soared after the announcement.
Medicis Pharmaceutical, a specialty pharmaceutical company, is engaged in the development and marketing of products for the treatment of dermatological and aesthetic conditions in the US. Key products include Solodyn, Perlane, Restylane, Ziana, Dysport and Zyclara. Our Recommendation
We have a Neutral recommendation on Medicis. Medicis carries a Zacks #3 Rank (Hold rating) in the short run.