Ivax Corp.'s plans to acquire Noven Pharmaceuticals Inc.,announced in September, have been canceled because it couldnot meet the accounting rules contemplated by the deal.
The transaction, originally valued at about $47 million, was toinvolve Ivax's acquisition of the 13.4 million outstandingshares of Noven stock for $3.50 a share, payable in shares ofIvax common stock.
Ivax (AMEX:IVX) closed Thursday at $35.13, down $1.13, whileNoven (NASDAQ:NOVN) closed at $2.37, up 13 cents. Both arelocated in Miami.
Ivax is a holding company with subsidiaries involved inspecialty chemicals, pharmaceuticals and medical diagnostics.Noven, which specializes in transdermal drug delivery, hasseveral products in preclinical and clinical development.
"An anticipated element of the transaction was that it wouldqualify for 'pooling of interests' accounting treatment,"Richard Pfenniger, Ivax general counsel, told BioWorld.
On learning that the deal would not qualify, Ivax determinedthat it was too costly to follow through. Without pooling ofinterests, large amounts of good will would be recorded inconnection with the transaction that would have to be chargedagainst future operations, Pfenniger said.
The companies are discussing other forms of collaboration,including strategic alliances, Pfenniger said.
-- Steve Usdin BioWorld Washington Bureau
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