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 Actelion, Europe's biggest biotech company, and ZS Pharma both
issued statements late on Thursday stating they had held preliminary
discussions, but did not specifically mention if the talks were
related to a buyout.
ZS Pharma said the talks were "regarding a potential strategic
transaction" and Actelion said the talks were "without any
commitment on either party".
Bloomberg had reported earlier that Actelion had offered to buy ZS
Pharma last month in a deal valued at $2.5 billion.
Actelion said in April it was looking for acquisition opportunities
but would not pay an overly high price.
Healthcare deal-making hit a record of $392.4 billion in 2014 and
has already surpassed that this year, reaching $447.5 billion as of
Sept. 10, according to Thomson Reuters data.
Acquirers are taking advantage of low borrowing costs to tap into a
wave of promising new drugs from smaller companies, broadening their
product line-ups to help them compete better.
"We have a team of six people who are supporting acquisitions and
business development," Andrew Weiss, Actelion's head of investor
relations, said on Friday.
Kepler Cheuvreux analyst Fabian Wenner said ZS Pharma's drug
portfolio could be a good fit in terms of therapeutic focus and a
deal at $2.5 billion would probably be neutral for Actelion's
earnings.
ZS Pharma's shares closed up 28 percent on Actelion's reported
interest, valuing the company at $1.9 billion, while shares in
Actelion fell 3 percent on Friday morning, valuing it at around
$15.5 billion.
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Actelion has a dominant position in treatments for pulmonary
arterial hypertension (PAH), which weakens the heart, but is looking
at ways to expand its sources of revenue. Its original blockbuster
drug Tracleer is about to lose patent protection, although sales of
new product Opsumit are growing.
The Swiss group has itself often been the subject of takeover talk
and its shares leapt in June on speculation that Shire was
considering a $19 billion bid.
San Mateo, California-based ZS Pharma's lead experimental drug,
ZS-9, is aimed at treating hyperalkemia, a build up of potassium in
the body that could lead to heart failure.
Analysts at Jefferies said ZS-9 had some overlap with the cardiology
component of Actelion's PAH business, adding that an all-cash deal
might be possible.
ZS Pharma filed a marketing application for ZS-9 with the U.S. Food
and Drug Administration in May. The FDA is expected to issue a
ruling on the application in May next year.
(Additional reporting by Vidya L Nathan in Bengaluru and Ben
Hirschler in London; Editing by Savio D'Souza and Mark Potter)
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