Paladin Labs, Inc. has entered an agreement to acquire Labopharm in transaction valued at approximately $20.5 million. Labopharm’s board of directors has approved the transaction.  

“The offer from Paladin provides compelling value, certainty and liquidity to our shareholders,” said Santo J. Costa, chairman of the Labopharm board. “Following a comprehensive review of alternatives under the previously announced strategic review, the Board of Directors has concluded that this all-cash offer, which is at a significant premium to the trading price of Labopharm’s shares, is the best way to maximize shareholder value.”

“The acquisition of Labopharm represents a unique opportunity for us to further strengthen our pain franchise through the addition of an established revenue stream in international markets with the potential upside provided by several product candidates,” said Jonathan Goodman, Paladin’s chief executive officer. “Labopharm’s expertise and experience around its products and technologies, both in Canada and internationally, will complement our existing capabilities as we execute our growth strategy.”

The transaction is subject to customary closing conditions.