Allergan’s $639 million buyout of Vitae is a bust.
The biopharma group $AGN reported this morning that it is writing off the Phase II development RORyT program delivered by the Vitae buyout. The acquisition deal for their IL-17 psoriasis drug in the fall of 2016 had raised some eyebrows at the time, bringing with it a huge premium as Allergan CEO Brent Saunders paid $21 a share, far ahead of the $8.10 price the biotech had at the time.
Allergan reported this morning that it took a $535.1 million charge in Q1, “primarily due to an impairment of the Company’s RORyT IP-R&D project for its Psoriasis indication.”
A spokesperson for the company noted that researchers had decided to scrap the effort due to safety concerns. She added: “(R&D chief) David Nicholson noted on the call that we continue to see RORyT as a valid target and we are exploring alternative formulations and indications.”
Allergan’s buyout came several months after Vitae had raised the issue on the safety of their lead drug after posting mid-stage trial data, which had badly dented its stock price at the time.
Allergan also gained VTP-38543, a topical LXRβ (Liver X Receptor beta) agonist for atopic dermatitis, from the deal. That drug flopped in a Phase II study shortly after Allergan did the deal, leaving nothing for any kind of upside.
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