Drug Development

On a spree, Allergan forks over a big premium to nab Vitae’s autoimmune drugs for $639M

Allergan’s buyout spree continued today, this time with a deal to bag Vitae Pharmaceuticals $VTAE for $21 a share, or $639 million in cash.

That’s a big premium for a company that had a market cap at $226 million Tuesday evening. Its stock closed yesterday at $8.10.

The buyout gives Allergan a small pipeline of drugs intended to disrupt the highly competitive autoimmune disease field. Its lead clinical drug is a RORyt inhibitor dubbed VTP-43742, which we heard of last March when some fretting over potential safety issues badly dented the biotech’s share price. The IL-17 drug just wrapped a Phase II study for psoriasis — which may well have provided the proof-of-concept data Allergan likes to look for — and is also intended for other related conditions.

Allergan is also adding VTP-38543, a topical LXRβ (Liver X Receptor beta) agonist for atopic dermatitis. That therapy is designed to work by decreasing inflammation in damaged skin tissue and repairing the outer layer of skin. It’s in a Phase IIa proof-of-concept clinical trial. Both drugs are being added to Allergan’s dermatology portfolio.

Fort Washington, PA-based Vitae experienced a serious setback in 2015 when its lead drug at the time failed a Phase II study for diabetes. And before that it had to stop a Phase I study for a BACE drug for Alzheimer’s after patients began to experience skin rashes.

Allergan is acquiring drugs that will have to face off against multiple rivals arriving in the autoimmune field. Allergan is one of a number of biopharma companies that have been scouting M&A deals. Since its merger pact with Pfizer fell through, the company has struck a string of these biotech buyouts, and the premium it’s paying underscores the intense competition in the industry to acquire new experimental drugs.

The new wave of psoriasis drugs to hit the market include Taltz (ixekizumab) from Eli Lilly, with late-stage contenders in the pipelines at J&J and Merck.

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