Pennsylvania-based Auxilium had previously agreed in June to merge with QLT, a onetime powerhouse in the Canadian biotech sector that is currently worth about $230 million in total.
QLT has lost its prominence since its main product, a treatment for age-related blindness, lost its market share several years ago as competitive products became available.
Vancouver-based QLT said it has been notified by Auxilium that a previously announced offer from Endo International PLC (TSX:ENL) is a better deal.
"We are obviously disappointed that the merger with Auxilium did not complete. In light of this development, we will immediately re-engage in our assessment of all potential strategic options," said Jason Aryeh, chairman of QLT's board of directors.
Endo is offering US$33.25 per share of Auxilium, to be paid in cash and stock. The offer is 55 per cent above Auxilim's closing stock price on Sept. 16, the day that Dublin-based Endo announced its offer for the U.S. company.
Under QLT's proposal, Auxilium shareholders would have received 3.1359 shares of QLT. At the time, QLT shares were worth about C$5.80 on the Toronto Stock Exchange and US$5.40 on Nasdaq. Since then QLT shares have dropped to US$4.04 in on the U.S. market and C$4.53 in Toronto — diminishing the value of its offer.