Allergan beefs up R&D with Vitae buy
- Allergan, fresh off a deal for a gene therapy company, said on Wednesday morning it had acquired Vitae Pharmaceuticals for $21 per share in cash, valuing the small dermatology company at about $639 million.
- The deal adds to Allergan's dermatology pipeline with a first-in-class Phase 2 psoriasis treatment, as well as a topical Phase 2 compound for the treatment of atopic dermatitis.
- The acquisition also gives Allergan access to Vitae's R&D platform, which the biotech boasts has the ability to discover compounds that pharma has "traditionally struggled to develop due to challenges related to potency, selectivity and pharmacokinetics."
While Allergan has long been a main player in the dermatology space, the company has lacked an R&D engine in most therapeutic areas. For the most part, Allergan has grown from a small biotech to a major player by tacking on late-stage products and already-marketed compounds through acquisition and licensing deals.
Often lumped into the same category as Valeant Pharmaceuticals when it comes to R&D, Allergan is trying to fix its rep and become like its more traditional big pharma brethren. Most big pharmas spend between 17% to 21% of their revenues on R&D — several ticks higher than the 15.6% of 2015 revenue which Allergan allocated for R&D last year.
"The Vitae team has been tremendously successful in discovering and conducting early development work in areas of medicine that can benefit from significant innovation," said Jeff Hatfield, president and CEO of Vitae in a statement.
The acquisition of Vitae will give Allergan a better base in R&D at a pretty low cost. The company currently has about $33 billion to spend after it sold its generics business to Teva Pharmaceuticals earlier this summer. (Although up to $10 billion of that money is earmarked for stock buybacks).
Allergan added to its eyecare offerings in August with the buy of ForSight VISION5 for only $95 million upfront and picked up the gene therapy company RetroSense Therapeutics for $60 million upfront earlier this month.
- Allergan Statement
Follow Lisa LaMotta on Twitter