The health care products company Mallinckrodt is buying Cadence Pharmaceuticals for about $1.21 billion in a bid to strengthen its specialty drugs unit.
Cadence, based in San Diego, focuses on the commercialization of products for use in hospitals. It makes Ofirmev, an injectable version of the drug acetaminophen, the active ingredient in Tylenol. Ofirmev has been used to treat an estimated 6 million to 7 million patients since its launch in January 2011.
"The acquisition of Cadence Pharmaceuticals is consistent with our goal of becoming a leading global specialty pharmaceuticals company," said CEO Mark Trudeau.
Shares of Cadence Pharmaceuticals Inc. surged $3.04, or 27.5 percent, to $14.11 in premarket trading Tuesday.
Ireland's Mallinckrodt PLC will pay $14 per share, a 27 percent premium to the Monday closing price of $11.07 for Cadence. The companies value the deal closer to $1.3 billion.
The boards of both companies have approved the deal that would make Cadence Pharmaceuticals Inc. a subsidiary at Mallinckrodt.
Mallinckrodt said Tuesday that it expects the acquisition, expected to close in March, to add to its adjusted earnings per share this year, and significantly add to adjusted earnings per share in 2015. .