ABBOTT BUYS SPECIALTY FIRM FOR $3.7 BILLION

U.S. drugmakers Abbott and Kos Pharmaceuticals announced today a definitive agreement under which Abbott will acquire Kos for $78 per share in cash, for a total transaction value of $3.7 billion. Kos is a specialty pharmaceutical company that develops and markets proprietary medications for the treatment of chronic cardiovascular, metabolic and respiratory diseases.

"This acquisition expands Abbott's presence in the lipid management market and will provide several on-market and late-stage pipeline products. Kos also complements our existing commercial and research and development expertise, and increases our R&D spending capacity," Miles White, chairman and CEO of Abbott, said.

The lipid management market is the single largest pharmaceutical segment and continues to grow at double-digit rates, according to the companies. Kos Pharmaceuticals' two lead products are Niaspan (niacin extended-release tablets), an extended-release niacin product that raises HDL, or good cholesterol, levels and Advicor (niacin extended-release/ lovastatin tablets), a Niaspan/lovastatin combination product that treats patients with multiple lipid disorders. Kos is also developing an inhaled insulin product.

The transaction is structured as a tender offer for all outstanding shares of Kos Pharmaceuticals followed by a merger. The transaction is subject to customary closing conditions, including antitrust clearance under the Hart-Scott-Rodino Act and acquisition of a majority of the outstanding Kos Pharmaceuticals shares.