Endo International has agreed to buy Auxilium Pharmaceuticals for $2.6 billion to gain testosterone products.

Dublin-headquartered Endo will pay $33.25 a share, and Auxilium holders will be able to choose cash, stock or a combination of the two, the companies said in a statement yesterday.

The price is 55 per cent above Auxilium’s September 16th value, when Endo said it wanted to buy the drugmaker for $28.10 a share.

The purchase will add to Endo’s offerings of branded pharmaceuticals. Auxilium’s testosterone products include Testim, a topical gel, and Testopel, a pellet that is embedded under the skin. Last year they generated $271 million.

Endo's strategy is similar to that of Valeant Pharmaceuticals – growing by buying smaller companies for their product lines. – (Bloomberg)