Allergan PLC agreed to acquire clinical-stage biotechnology company Vitae Pharmaceuticals Inc. for $639 million, more than double its market value, in a move aimed at strengthening the drugmaker’s skin-care pipeline.
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The price values Vitae at $21 a share, compared with the company’s closing price of $8.10 on Tuesday. Vitae shares jumped to $20.93 in premarket trading Wednesday, while Allergan shares rose 0.8%.
The deal gives Allergan a drug in mid-stage trials that is intended to treat psoriasis, a disease that causes scales and itchy dry patches, and other autoimmune disorders. Such treatments make up one of the drug industry’s biggest markets, which EvaluatePharma says had nearly $49 billion in world-wide sales last year.
Vitae also is developing another drug to treat atopic dermatitis, or eczema, a skin disease that causes similar itchy patches.
“The acquisition of Vitae is a strategic investment for Allergan that adds strength and depth to our innovative medical dermatology franchise,” Allergan Chief Executive Brent Saunders said.
Allergan had been interested in an eczema drug that a company called Anacor Pharmaceuticals Inc. was developing, according to a person familiar with the matter. But rival Pfizer Inc. agreed in May to buy Anacor for $4.5 billion.
The Anacor drug is further along in development and has a different mechanism of action than the Vitae drug that Allergan plans to buy.
Vitae said it uses its special “contour” drug design platform to better discover drug candidates for diseases where biopharmaceutical research has previously struggled to find them.
The deal is subject to customary closing conditions and antitrust approval and is expected to close by the end of the year.
Sept. 15, 2016