Valeant Pharma boosts offer for Obagi to $418M

LONG BEACH, Calif. -- Obagi Medical Products Inc. said Wednesday that Canadian drugmaker Valeant Pharmaceuticals boosted its offer to buy the dermatology products maker, topping a bid made a day ago by a German rival.

Obagi said it struck a deal with Valeant Pharmaceuticals International Inc. that calls for it to pay $24 per share, or a total of about $418.3 million, for the company. The news sent Obagi shares up 10 percent in morning trading.

Obagi said its board has approved the deal and is recommending that stockholders tender their shares in Valeant's offer, which is set to expire on April 23. A spokeswoman for Merz didn't immediately return a call for comment.

The sweetened offer came a day after German drugmaker Merz Pharma Group offered to buy Obagi for $22 per share, or about $383.5 million.

Late last month, Valeant agreed to pay $19.75 per share, or a total of about $343.7 million, for Obagi. Merz said Tuesday that it had been in private talks with Obagi before that deal was announced and wasn't aware that it was considering signing a deal with another company so quickly.

Long Beach, Calif.-based Obagi makes skin anesthetics as well as prescription and over-the-counter treatments for wrinkles, acne, sun damage and other skin problems. It posted sales of $120 million last year.

In morning trading, Obagi shares rose $2.19, or 10 percent, to $25.07, while Valeant's U.S. shares edged up 71 cents to $76.08.

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UPDATE 2-Shire confident on 2013 as it boosts genetic drugs unit

LONDON, Jan 8 (Reuters) - British drugmaker Shire reassured investors that it was on target to meet 2013 earnings expectations and said it was boosting its genetic drugs line with a new acquisition.

The company, which has expanded by acquiring late-stage or already marketed drugs in niche areas, had a weak third quarter, missing market expectations as it faced increased generic competition for its hyperactivity drug.

However, outgoing CEO Angus Russell will tell investors at a healthcare conference in San Francisco that the company "is now increasingly confident of meeting current consensus earnings expectations for 2013", Shire said in a statement on Tuesday.

Analysts forecast earnings per share of $2.20 in 2013, according to Thomson Reuters I/B/E/S estimates.

The company also reiterated that it would post double-digit earnings growth in 2012.

Earlier on Tuesday Shire said it had agreed to buy Lotus Tissue Repair, a U.S. biotechnology company developing the first treatment for a rare genetic disorder that causes extremely fragile skin and recurrent blister formation.

Shire said the purchase, for an undisclosed sum, would boost the pipeline of its Human Genetic Therapies unit, which makes protein therapies for genetic conditions such as Hunter's Syndrome and Fabry and Gaucher diseases.

Lotus Tissue Repair's lead product candidate, which is in late pre-clinical development, is a protein replacement therapy for the treatment of dystrophic epidermolysis bullosa (DEB), Shire said.

"DEB ... (impacts) the lives of patients and their families, many of whom have few or no treatment options other than palliative care," said Philip J. Vickers, head of R&D at Shire Human Genetic Therapies.

Shares in FTSE 100-listed Shire closed up 2.6 percent at 1,963 pence, their highest level since September.

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