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Shares of Mississauga-based drug maker Valeant Pharmaceuticals International Inc. jumped sharply Tuesday after the company revealed a deal to buy a Swiss firm with operations across central and eastern Europe.

The acquisition of privately held PharmaSwiss SA for just under $500-million (U.S.) indicates Valeant is on track to meet its stated goal of making around five major purchases or partnerships this year. Early in January, chief executive officer Michael Pearson said the company wanted to do that many deals, primarily of private companies in emerging markets.

The PharmaSwiss purchase fits that bill exactly, although it is at the top end of the $200-million to $500-million price tag range Mr. Pearson suggested.

The target company operates in 19 countries in central and eastern Europe, selling a broad range of its own drugs as well as representing other manufacturers. Most are generic and over-the-counter products. Its 2010 sales were about $250-million.

Word of the acquisition sent shares of Valeant - which changed its name from Biovail Corp. last year after the Canadian company merged with a big U.S. rival - to a level not seen for almost eight years. The stock rose 5.8 per cent Tuesday on the Toronto Stock Exchange.

Valeant stock has more than doubled since the merger was first announced last summer.

Analyst Lennox Gibbs of TD Securities Inc. said in a report Tuesday that the deal for PharmaSwiss should give Valeant an immediate boost in revenue and profit, and will help it move more deeply into emerging markets.

In January, Mr. Pearson had said key priorities were to expand in emerging markets to reduce some of the company's reliance on the highly competitive North American market.

Mr. Gibbs said PharmaSwiss will more than double Valeant's European business, which will now generate more than $400-million in revenue annually, about 20 per cent of its total revenue. It will also boost Valeant's emerging-market exposure to almost 30 per cent, he said.

Analyst Marc Goodman of UBS Securities said in a report that "this is the kind of deal investors want to see," adding that the purchase was "very cheap" given that PharmaSwiss is expecting annual growth of about 20 per cent.

Mr. Goodman maintained his "buy" rating on Valeant stock, but raised his 12-month price target to $43 from $40.