Continuing M&A spree, Allergan picks up Motus for $200M
- Allergan continued its "stepping-stone" deal making strategy on Thursday, picking up its option to buy Motus Therapeutics following positive results from a Phase 2b study of Motus' gastroparesis drug.
- The Dublin-based biopharma will pay Motus' parent company Rhythm Holding $200 million to acquire Motus, with the potential for another contingent payment available upon the first commercial sale of the drug in question, known as relamorelin.
- Allergan plans to push relamorelin into Phase 3 trials to confirm the efficacy seen in the Phase 2b study. Relamorelin is designed to treat gastroparesis, a stomach disorder characterized by vomiting and bloating, in patients with type 1 and type 2 diabetes.
Flush with cash in the wake of its $40.5 billion generics deal with Teva, Allergan has been busy on the M&A front. Company CEO Brent Saunders has eschewed any major transformational deal in favor of (what he terms) "stepping-stone" deals aimed at building out Allergan's pipeline in its core therapeutic areas.
In September alone, Allergan inked deals to acquire four companies with portfolios in eye care, dermatology, and non-alcoholic steatohepatitis (NASH). While two of the deals featured relatively small upfront payments, Allergan did bet big on the NASH-focused Tobira Therapeutics, paying roughly 6 times the average closing price of Tobira's stock in the 30 days prior to the deal. All told, the deal with Tobira could be worth $1.7 billion if certain milestones are hit.
Gastroenterology is another core area for Allergan. In the Phase 2b study, Motus' relamorelin showed "substantial efficacy" in reducing symptoms of nausea, fullness, abdominal pain and bloating. Notably, patients on relamorelin saw a 75% reduction in vomiting frequency compared to baseline. Yet an unusually high placebo response made it difficult to evaluate relamorelin's efficacy against the primary endpoint of vomiting frequency, Allergan said.
Umer Raffat, a senior equity analyst with Evercore ISI, suggested in an investor note that the language could indicate relamorelin didn't reach statistical significance over placebo on the primary endpoint.
Diabetic gastroparesis hasn't seen a new treatment approved in the U.S. since 1983, even though an estimated 2.3 million with moderate or severe gastroparesis are seeking treatment, according to the company.
While the drug was well-tolerated overall, Allergan said "there was some evidence of dose-related adverse events related to worsening of glycemic control in some patients." Given the patient population, this will likely be an area to watch as development of the drug advances.
Allergan had previously paid $47 million to secure the option to acquire Motus and fund the Phase 2b study. The deal is expected to close by the end of the year.
- Allergan Statement
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