Pfizer Inc. has agreed to acquire Encysive Pharmaceuticals Inc. for about $195 million, sending shares in Houston-based Encysive up 110 percent.

While it was no secret that Encysive was up for sale, it did come as a surprise that New York-based Pfizer would be the company to acquire it, said Navdeep Jaikaria, an analyst with Rodman and Renshaw. But the acquisition "makes perfect sense," he told BioWorld Today. "It's a good deal for both companies."

He added that both companies have drugs to treat pulmonary arterial hypertension (PAH), and the existing sales force could be tapped, allowing revenues from sales to go directly to the bottom line.

Under the agreement to acquire Encysive, Pfizer gains the rights to PAH treatment Thelin (sitaxsentan sodium), as well as Encysive's other pipeline candidates. Pfizer's PAH treatment, Revatio, would not be at odds with Thelin since the two products could be combined, Jaikaria said.

PAH is an incurable disease that is estimated to affect 100,000 to 200,000 people in North America and Europe, including about 55,000 in the U.S. It is a relatively rare disease, characterized by high blood pressure and structural changes in the walls of the pulmonary arteries, the blood vessels that connect the right side of the heart to the lungs.

Thelin has been approved for marketing in the European Union, and currently is available in several EU member countries, including the UK, Germany, Ireland, Spain, France, Italy, Belgium, Luxembourg and the Netherlands. Thelin also has been approved in Australia and Canada.

In the U.S., Thelin has been the subject of three approvable letters from the FDA. Pfizer plans to conduct a pivotal Phase III trial to support U.S. registration efforts. "We look forward to applying Pfizer's significant resources to the launch of Thelin in additional countries," Ian Read, president of Pfizer's Worldwide Pharmaceutical Operations, said in a news release.

Encysive has explored other uses for Thelin beyond PAH and has another potential product in the pipeline, TBC3711, which the company said could be more potent than Thelin. In addition, it has another marketed product, Argatroban, that was approved by the FDA in 2000 for the prevention or treatment of thrombosis in heparin-induced thrombocytopenia.

Through a collaborative agreement with Schering-Plough Corp., Encysive is developing and optimizing TBC4746, an oral VLA-4 antagonist compound, for the treatment of asthma and multiple sclerosis.

Pfizer will make a cash tender offer for all issued and outstanding shares of Encysive for $2.35 per share, a value of about $195 million, the companies said. Following completion of the tender offer, a subsidiary of Pfizer will merge with Encysive.

George W. Cole, president and CEO of Encysive, called Pfizer's offer "superior," saying in a statement that it represented "the best option" for shareholders.

Outstanding Encysive shares not tendered pursuant to the tender offer will be converted into the right to receive the per-share price paid under the offer, the companies said. Upon Pfizer's acquisition of Encysive, Pfizer will assume Encysive's change of control repurchase obligations under its 2.5 percent convertible senior notes, they said.

The Encysive board has unanimously approved the merger but Encysive stockholders still must accept the tender offer and their shares, a Pfizer spokeswoman confirmed.

The transaction is expected to close in the second quarter, subject to customary closing conditions, including approval under the Hart-Scott-Rodino Antitrust Improvements Act.

Shares of Encysive (NASDAQ:ENCY) rose $1.19, to close at $2.27.