R.F. Lafferty Devalues Auxilium and QLT Deal

R.F. Lafferty grades Auxilium Pharmaceuticals, Inc.

acquisition with QLT, Inc.

to be neutral based on lack of sufficient cash for Auxilium to complete the deal. Auxilium announced on Thursday they will acquire QLT for 3.1359 shares of Auxilium stock, equivalent to a twenty-five percent premium based on QLT's stock price on June 25, 2014. The merger is expected to close later in the fourth quarter of 2014.

Despite the deal announced to be a stock-for-stock deal, Auxilium lacking the cash power could mean that Auxilium acquiring QLT creates an opportunity cost, making the deal less valuable. Shares of Auxilium drop 3.93 percent to $20.43 a share in the middle of Thursdays market hours.