Auxilium Pharmaceuticals, Inc., a specialty biopharmaceutical company, has completed the acquisition of  Actient Holdings LLC (Actient), a private urology specialty therapeutics company, for $585 million in upfront cash plus certain contingent consideration and warrants to purchase Auxilium common stock.  Auxilium expects to receive a tax benefit, with a net present value of approximately $60 million, as a result of the acquisition of Actient.  The transaction is expected to be immediately accretive on a non-GAAP basis to Auxilium's 2013 adjusted net income.

Actient is a private company primarily focused on urology.  Actient's urology portfolio includes Testopel, the only long-acting implantable testosterone replacement therapy (TRT), Edex, the leading branded non-oral drug for erectile dysfunction, Striant, a buccal system for testosterone delivery, and Osbon ErecAid, a device for aiding erectile dysfunction.  Actient also has a non-promoted respiratory franchise, including Theo-24 and Semprex-D, along with three other non-promoted products.  The company has approximately 165 employees, including 100 sales representatives in two focused field forces.

"The acquisition of Actient is a major step forward in our strategy to expand our specialty therapeutic offerings: we believe that it expands our TRT portfolio, strengthens our commitment to urologists, enhances our growth trajectory, and will create significant value for our shareholders," said Adrian Adams, chief executive officer and president of Auxilium.  "This is a compelling fit from both a strategic and financial standpoint.  The transaction creates a leading urology franchise with a diversified product portfolio and sales force leverage that is well positioned for growth of our current portfolio as we pursue the potential expansion of our label for Xiaflex in Peyronie's disease.  From a financial perspective, we expect Actient to be immediately accretive on a non-GAAP basis to our 2013 adjusted net income and to yield a strong return on invested capital.  We believe this transaction will help enable us to increasingly drive our future earnings growth."

Ed Fiorentino, chief executive officer of Actient, commented "We are excited to join the Auxilium team and look forward to what we can accomplish together.  As part of a larger company with enhanced capabilities, we will offer our urology customers a wider range of solutions, and our other specialty pharmaceutical products should have greater opportunities to grow.  Actient and Auxilium share a culture of innovation and a strong focus on our physician customers and patients.  I am confident that this is a winning combination for our customers and the patients we collectively serve as we continue to fulfill our mission of improving patient outcomes."

Adams concluded, "We are pleased to welcome the Actient team to the Auxilium family.  Together we will remain focused on satisfying unmet medical needs to provide the highest quality care to our patients."

Auxilium will pay Actient unit holders $585 million in upfront cash a warrant for 1.25 million shares of Auxilium common stock with an exercise price of $17.80 per share and up to $50 million of contingent consideration based upon the achievement of future revenue targets.  Auxilium expects to receive a tax benefit, with a net present value of $60 million, as a result of the acquisition of Actient.

To finance the acquisition, Auxilium is using cash on hand and the proceeds from a new secured loan of $225 million from Morgan Stanley Senior Funding, Inc.

Actient is a specialty products company focused on therapeutics to improve patient outcomes. The company was formed to acquire companies and products with a focus on select physician specialties.