Endo on Tuesday offered to buy Auxilium for $2.2 billion in cash and stock and Chief Executive Rajiv De Silva clarified the offer pertained to only Auxilium.
Auxilium's shares rose about 44 percent to $31 in premarket trading on Wednesday, above Endo's offer of $28.10. Endo's U.S.-listed shares rose about 5 percent.
QLT's shares fell 15 percent in after market trading on Tuesday, after analysts said Endo's offer could complicate Auxilium's buyout of QLT.
"Now that Auxilium is firmly in play, we expect the company's (mostly frustrated) shareholder base to push for a sale to the highest bidder," Cowen & Co analysts said in a note.
Auxilium said on Wednesday its would review Endo's proposal, but still adopted a poison pill with a 15 percent trigger.
Poison pills, or shareholder rights plans, are designed to stop hostile takeover attempts by triggering the issuance of new shares, which dilutes the holdings of all investors if any one exceeds a set threshold.
Endo's bid was made to expand its men's healthcare products business by gaining access to Auxilium's brands, including Xiaflex, which is approved to treat Peyronie's disease, Dupuytren's contracture, and frozen shoulder syndrome.
Chesterbook, Pennsylvania-based Auxilium said in June that it would buy eye drug maker QLT for $346 million in stock, in order to move its headquarters to lower-tax British Columbia. The deal is expected to close in the fourth quarter.
Endo itself moved overseas to lower its taxes, shifting its base from Malvern, Pennsylvania to Dublin last year when it acquired Canadian drugmaker Paladin Labs.
Auxilium's financial adviser is Deutsche Bank Securities Inc. Its legal advisers are Willkie Farr & Gallagher LLP; Skadden, Arps, Slate, Meagher & Flom LLP; and Morgan, Lewis & Bockius LLP.
(Reporting by Natalie Grover in Bangalore; Editing by Savio D'Souza)
