Allergan picks up regenerative med company for $2.9B

Dive Brief:

  • Allergan on Tuesday bought the regenerative medicine company LifeCell from Texas-based Acelity L.P. for $2.9 billion, staying true to its 'stepping-stone' dealmaking strategy. 
  • LifeCell markets several dermal matrix products which are used in reconstruction surgeries and tissue repair procedures, complementing Allergan's existing medical aesthetics business. 
  • Allergan CEO Brent Saunders called the deal an "entry point" for the Irish pharma into regenerative medicine and indicated the deal would be "immediately accretive" to earnings. 

Dive Insight:

Since Allergan closed the sale of its generics business to Teva in August, Saunders has avoided the temptation to splurge on a big-ticket acquisition. Instead, Saunders has chosen to make incremental additions, expanding Allergan's portfolio and pipeline in key areas of focus such as eye care, central nervous system and gastroenterology. 

The addition of Lifecell — the eighth acquisition since August — fits neatly with Allergan's medical aesthetics business.

LifeCell's commercial products include Alloderm, an allograft tissue matrix used to repair soft tissue; Revolve, a fat-grafting device used for plastic and reconstructive surgery; and Strattice, a porcine-based tissue matrix that is a common option for repairing abdominal walls. 

All told, Allergan expects Lifecell's products to generate $450 million in 2016 revenue, growing at mid single-digit rate thereafter. 

"The acquisition of LifeCell is both strategically and financially compelling to Allergan and serves as our entry point into regenerative medicine as we create a world-class aesthetic and regenerative medicine business in plastic surgery," Saunders said. 

Per the deal, Allergan will also pick up LifeCell's manufacturing facilities and R&D operations, which are located in New Jersey. 

In addition to the steady drip of M&A deals, Allergan has also earmarked $15 billion for stock buybacks to help pay down debt. 

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Filed Under: Mergers and Acquisitions / Deals Corporate News