Authored by James Sheppard
Bayer recently announced that they had completed the purchase of USA based Conceptus for $1.1bn in cash. The $31 per share offer was a 20% premium on the closing share price. The purchase gives Bayer access to Conceptus approved birth control product Essure.
Essure was approved by the FDA in 2002 and is a set of coils that are inserted into fallopian tubes to stop conception. The product will join Bayer’s intrauterine devices, Mirena and the recently approved Skyla. The inter-uterine devices are designed to be used for several years at a time, while Essure is a permanent option.
Conceptus is also currently awaiting approval in Europe for a birth-control patch and another product in late stage development. Bayer currently has a multi-million dollar contraceptive pill business which has recently run into trouble with generic competition and safety concerns. Bayer recently announced they had set aside 1.19bn Euros to cover litigation related to its contraceptive business.
Despite the setbacks, Bayer’s contraceptive business brought in revenues of 1.916bn Euros in 2012. The Conceptus purchase will fit into Bayer’s contraceptive business and shore up the segment and help to offset the decline seen by a rise in generic competition.