Warner Chilcott Buying P&G Drug Business for $3.1B

Shares of Ireland's Warner Chilcott Plc skyrocketed Monday on news of its bid to morph from a small, specialty pharmaceutical company to a global player by buying Procter & Gamble Co.'s prescription drug business for $3.1 billion.

The maker of women's health and dermatology products will get a portfolio with $2.3 billion in annual sales, including blockbuster osteoporosis drug Actonel, and triple its revenue in a rare deal financed entirely by bank debt.

Overnight, Ardee, Ireland-based Warner Chilcott will greatly expand its women's health products, gain a toehold in the somewhat-complementary urology and gastroenterology markets, and expand into 14 new countries, mainly in Western Europe.

"It gives them immediate scale. It gives them an R&D franchise, too," said analyst Les Funtleyder at Miller Tabak & Co.

The deal brings Warner Chilcott an unspecified number of Procter and Gamble's prescription drugs in development, manufacturing facilities in Puerto Rico and Germany, a trained sales force of roughly 1,200 and a research and development team nearly as big.

"Our acquisition of the Procter & Gamble pharmaceutical business is a transformational event for Warner Chilcott," Roger Boissonneault, president and chief executive, told analysts.

Warner Chilcott shares surged $4.35, or 27 percent, to close at $20.41 in Nasdaq trading Monday, while Cincinnati-based Procter & Gamble's shares fell 24 cents to $53.34 on the New York Stock Exchange.

Actonel alone will bring nearly $1 billion in annual sales, more than Warner Chilcott's total 2008 revenue of $938 million. Company executives told analysts they plan later this year to seek U.S. approval for a successor drug — important because Actonel loses patent protection in 2013.

The company also gets a colitis drug called Asacol with about $600 million in annual sales, a patent through 2014 and an extended release version just launching, plus Didronel for Paget's disease and other bone disorders and Enablex for overactive bladder. The deal is expected to close by year-end.