Medicis Pharma Shares Fall on Q-Med Lawsuit
11/09/2012| 03:03pm US/Eastern
By Anna Prior
Q-Med Inc., a division of pharmaceutical company Galderma, has sued Medicis Pharmaceutical Corp. (>> Medicis Pharmaceutical Corp) over the contracts for several dermal filler products in connection with Medicis's planned merger with Valeant Pharmaceuticals International Inc. (>> Valeant Pharmaceuticals Intl Inc).
Medicis shares recently fell 3.3% to $41.91 on heavy volume as investors worried about the impact the lawsuit could have on the merger. The stock has risen 26% for the year, jumping 38% after Valeant announced a $44-a-share offer price.
In its quarterly filing, Medicis said Q-Med is alleging breach of obligation regarding its licensing and contracts for Restylane and Perlane, and it has the right to withhold consent to a change-of-control of Medicis that would result in a transfer to Valeant of the exclusive rights to market and sell the dermal filler products.
"We think their position is without merit," said Laurie Little, vice president of investor relations for Valeant. "We're going to go ahead and vigorously defend ourselves."
Medicis also said in the filing that the merger agreement doesn't require the consent of Q-Med, and Ms. Little added that at this point, Valeant is still moving forward with the transaction.
In September, Valeant agreed to buy Medicis for $2.6 billion, the latest in a string of acquisitions that have transformed the Canadian drug maker into a multibillion-dollar global company. Valeant focuses on branded pharmaceuticals, branded generics and over-the-counter products, and it specializes in neurology and dermatology.
Write to Anna Prior at firstname.lastname@example.org
Subscribe to WSJ: http://online.wsj.com?mod=djnwires