April 22, 2016
By Mark Terry, BioSpace.com Breaking News Staff
It’s a toss-up on whether Dublin-based Allergan (AGN) is better known for Botox or for the failed Pfizer (PFE) merger, but today’s move suggests that Allergan knows. The company announced today it had acquired Boston-based Topokine Therapeutics. Along with the company comes XAF5, a first-in-class topical agent to treat steatoblepharon, better known as bags under the eyes.
As part of the deal, Allergan paid $85 million upfront with various developmental and sales milestones for XAF5 included. Topokine launched its pivotal Phase IIb/III clinical atrial of XOPH5-OINT-3 in January of this year. Topokine was a privately-owned company. Investors included Schooner Capital.
“The acquisition of Topokine and its XAF5 technology adds an innovative technology to Allergan’s industry leading mid-to-late stage pipeline of more than 70 programs and bolsters our leadership in medical aesthetics,” said David Nicholson, Allergan’s executive vice president and president, global brands research & development, in a statement. “XAF5 has the potential to be the first topical fat reduction product for the treatment of steatoblepharon, a condition with no current therapeutic options available for patients. We look forward to continuing the outstanding development work conducted by the Topokine team to bring this innovative medical aesthetic treatment to market.”
Since the collapse of the Pfizer-Allergan merger on April 6 as the result of new U.S. Treasury regulations regarding tax inversions, there has been nonstop speculation on the part of investors and analysts on who Allergan will buy. Allergan received a $150 million breakup fee after the deal was terminated, but it has also pulled in $40 billion from its sale of its generics business to Israel-based TEVA (TEVA).
“Allergan can be expected to start its search for high-growth companies that are mainly focused on research and development (R&D),” Aliya Kaleem recently wrote in Bidnessetc. “The company had said that it would look for such targets which maintain significant R&D spending before it signed a deal with Pfizer; Allergan Plc can be expected to maintain the same criteria. The company’s management said it seeks opportunities that have longer-term bottomline growth.”
Allergan didn’t wait long after the Pfizer deal ended before moving forward with an acquisition. Only a day later it inked a deal with Heptares Therapeutics, a wholly-owned subsidiary of Sosei Group Corporation. Allergan paid an upfront fee of $125 million for exclusive global rights to a portfolio of novel subtype-selective muscarinic receptor agonists to treat various neurological disorders, including Alzheimer’s disease. Various developmental and sales milestones could add up to $3.3 billion.
If the Heptares deal was intended to broaden and deepen its research-and-development focus in central nervous system disorders, and the Topokine deal expands its reach in dermatology, will it make strategic acquisitions in its other areas—eye care, women’s health, urology, anti-infectives, gastroenterology or biosimilars—be far behind? There have been rumors that Valeant is planning to sell off its Bausch & Lomb unit. And with Valeant looking to pay down $30 billion in debt, the Canadian company’s gastrointestinal portfolio might be appealing to Allergan as well.