Furiex Pharmaceuticals Inc. – founded in 1985 by Fred Eshelman as a spinoff of PPD, which he also founded – reported in a joint announcement with Forest Laboratories Inc. Monday that it has entered into a definitive agreement to be acquired by New York City-based Forest. Purchase price, according to the announcement, is approximately $95 per share or $1.1 billion in cash.

Forest could also pay as much as $30 more per share (approximately $360 million in aggregate) in a Contingent Value Right (CVR) if Furiex’s promising new drug, eluxadoline, wins optimal Federal Drug Administration (FDA) approval and designation, according to the news release.

Forest expects to use cash on hand to fund the acquisition of Furiex, the news release stated, adding that the planned acquisition is expected to close in the second or third quarter of 2014, pending regulatory approval.

“The acquisition of Furiex builds on our growing position in gastroenterology and helps to create a leading GI company within Forest,” Brent Saunders, chief executive officer and president of Forest Laboratories, said in the release.

“Forest’s acquisition of our company is a testament to the strength of the business we have built,” Eshelman said in the release. "I am very proud of our team for its hard work and excellent development of eluxadoline in just under four years. There is a strong business fit between Furiex and Forest, and eluxadoline is expected to contribute to Forest’s leading GI franchise.”

There has been speculation for several months that drug developer Furiex could be in the market for a buyer.

On Feb. 4, Furiex announced very positive results in Phase III clinical trials for eluxadoline, a drug it developed to treat diarrhea-predominant strain of irritable bowel syndrome (IBS-d). Word of those results sent the price of Furiex shares dramatically higher and made the company a potentially attractive acquisition target.

In late February, Bloomberg reported that the company was working with Bank of America Corp. to find a buyer. At that time, however, Eshelman declined to comment on the matter beyond saying that selling the company was one possible strategy for securing the resources necessary to bring the new drug to market.

IBS-d affects approximately 28 million patients in the United States and Europe, Eshelman has said in previous interviews with the Business Journal. Results of Phase III clinical trials evaluating the efficacy and safety of eluxadoline in the treatment of IBS-d met important standards of both the U.S. Food and Drug Administration and the European Medicines Agency, the company has stated in previous releases. As a result, Furiex is on track to submit a New Drug Application for eluxadoline by the end of the third quarter of 2014, according to the joint release.

Eshelman maintains his office in Wilmington although Furiex is officially headquartered in Morrisville, N.C. Many company employees work remotely, he has said.