Endo Health Solutions Inc.'s recent acquisition designed to lower its tax rate may be following Valeant Pharmaceuticals International Inc.'s blueprint for a lucrative takeover spree.
Endo shares are up 42 percent to a record after Chief Executive Officer Rajiv De Silva agreed last week to buy Canadian drugmaker Paladin Labs Inc. The deal will allow Endo to reincorporate in Ireland with a lower tax rate, giving it an edge as it pursues more pharmaceutical takeovers. It's a tactic that helped Valeant make more acquisitions than any of its peers in the last three years and increase its stock price sevenfold, according to data compiled by Bloomberg.
Endo, with a $7.1 billion market value, could consider buying BioDelivery Sciences International Inc., its partner on a pain medicine in development, and Impax Laboratories Inc., Janney Montgomery Scott LLC said. Such acquisitions could help counter generic competition that has started to eat away sales of Endo's main painkillers. De Silva, the former president of Valeant, took the helm in March after his predecessor was criticized for acquisitions of medical-device businesses that never paid off.
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