Optimer Shares Soar Amid Reports of Buyout Interest

Reports that several big pharmas have shown interest in buying Optimer Pharmaceuticals (NASDAQ: [[ticker:OPTR]]) sent shares of the drugmaker soaring about 20 percent today in Nasdaq trading that was more than four times the company’s recent average daily volume. By late afternoon, Optimer was trading near $14 a share, after gaining $2.31 a share in the morning.

The list of prospective buyers reportedly includes GlaxoSmithKline (NYSE: [[ticker:GSK]]), AstraZeneca (NYSE: [[ticker:AZN]]), Cubist Pharmaceuticals (NASDAQ: [[ticker:CBST]]), and Japan’s Astellas.

Optimer’s headquarters moved to Jersey City, NJ, late last year from San Diego, where the company was founded and where much of its operations remain. In late February, Optimer disclosed that board chairman and former Pfizer CEO Henry McKinnell would take over as CEO from Pedro Lichtinger, who had resigned, along with Optimer’s general counsel. The company also disclosed it was considering a possible sale, and had hired Centerview Partners and JPMorgan Chase as strategic advisors.

Optimer hopes to attract a buyer willing to pay as much as $1 billion, according to a Bloomberg report this morning that cites two unnamed sources familiar with the situation. That would be a premium over Optimer’s market valuation, which climbed above $660 million today.

The company introduced the antibiotic fidaxomicin (Dificid) for treating intestinal infections caused by C. difficile bacteria in the U.S. market in 2011. Analysts estimate that sales could hit $400 million a year, according to Fierce Pharma, although Optimer recently reported that fidaxomicin generated almost $75 million in sales for the company in 2012.

A buyout offer for Optimer would likely attract a flurry of merger arbitrage activity as hedge fund managers place their bets on the likelihood that a deal would actually go through.

As McKinnell told analysts and investors in February, Optimer informed civil regulators at the Securities and Exchange Commission and criminal authorities at the U.S. Department of Justice that the company had uncovered possible violations of federal law, including the Foreign Corrupt Practices Act.

The problems apparently stem from a stock grant involving Michael Chang, a co-founder and Optimer’s former chairman. The company disclosed last April that seven of Optimer’s eight directors voted to strip Chang of his role as chairman, and asked for his resignation from the board. The company also fired two Optimer executives.

The company has not provided many details about the nature of the federal investigations, or the extent of the problems uncovered last year, but potential buyers will certainly be asking those questions as buyout talks move ahead.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.