Allergan sells off dermatology drugs to Spain's Almirall
- Almirall said Friday it will buy five dermatology drugs from Allergan, furthering the Spanish pharma's plans to expand its U.S. presence. Per deal terms, Allergan will receive $550 million upfront in cash at deal closing.
- The products all come from Allergan's medical dermatology unit: Aczone, Tazorac, Azelez, Cordran Tape and Seysara, which is currently under review by the Food and Drug Administration.
- In a statement, Almirall focused on the opportunities for Seysara, a tetracycline-derived antibiotic that it predicts will earn between $150 million and $200 million in peak annual sales. The company anticipates FDA approval in the fourth quarter of 2018, during which the deal is also expected to close.
While the acquisition is modest in size, it is notable for what it signals about both companies and where they may be headed.
Four of the drugs are already on the market, but none rank as huge sellers. Combined, they brought in $70 million in net sales during the first half of 2018.
The fifth drug, Seysara, is expected to secure U.S. approval in the fourth quarter of 2018 as a treatment for moderate-to-severe acne vulgaris.
For Allergan, this can be seen as dumping off some non-core assets for cash, which is perhaps more useful as the company continues to pay down its debt of roughly $25 billion. In the first half of 2018, Allergan said it paid down $4.7 billion.
Aczone and Tazorac both recently lost patent exclusivity and have seen their sales suffer. According to company filings, Aczone sales dropped 55% over the first six months of 2018 compared to the same period last year. Tazorac sales fell 56%, from $36 million to $16 million.
Allergan has focused on medical aesthetics, eye care and drugs for diseases of the central nervous and gastrointestinal systems. Earlier this year, the pharma announced plans to sell its women's health and infectious disease units.
As for Almirall, its CEO anticipated the deal would boost the company's position in the U.S.
"It will reinforce and consolidate our position in the world's largest dermatology market and is a well-balanced portfolio of mature and growth brands with a major launch opportunity of an innovative New Chemical Entity," CEO Peter Guenter said in a statement.
The company also believes Seysara holds medium- to long-term growth potential.
"Seysara is the first oral antibiotic in 40 years, specifically designed for dermatology, that has demonstrated to be an effective, safe and well-tolerated treatment option for physicians treating patients with moderate to severe acne," said Bhushan Hardas, chief scientific officer, also in the statement.
Almirall noted the deal will be immediately accretive to earning per share and help the Spanish company expand in dermatology.
The deal is expected to close in the fourth quarter of 2018 pending approval by U.S. antitrust authorities.
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