The company that makes Botox is the subject of the latest biopharma mega-deal.
Chicago-based AbbVie said Tuesday it would acquire Ireland-headquartered Allergan for $63 billion, or $78.45 per share, equal to the former’s Monday closing price. The companies said the deal would provide immediate scale and profitability for AbbVie while allowing the company to diversify into new therapeutic areas like aesthetics.
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Shares of AbbVie were down 14 percent Tuesday morning on the New York Stock Exchange following the news. Shares of Allergan rose nearly 30 percent.
In a slideshow, AbbVie stated that Allergan offered $15.7 billion in growth assets, including its $4.3 billion medical aesthetics business and the $2 billion business around its flagship product, Botox (onabotulinumtoxinA), itself the leading cosmetic neurotoxin product.
But Allergan’s experience over the last few years hasn’t been all smooth sailing. Whereas its shares were trading at more than $300 four years ago, they closed Monday at $129.64. On the one hand, sales Botox have remained strong, with revenues increasing in the first quarter of this year to $868.4 million, from $817.3 million during the same period last year. Sales of several products – particularly Vraylar, Juvederm and Lo Loestrin – also offset lower sales of other products from divestiture and loss of exclusivity. On the other hand, sales of its second top-selling product, the dry eye drug Restasis (cyclosporine), fell from $274.1 million to $242.1 million during the same period, and it’s facing patent expiration.
AbbVie faces competitive headwinds of its own. While the slideshow forecast the continued importance in the future of its top-selling product, the autoimmune disease drug Humira (adalimumab), the drug also faces competition from biosimilars, with three Humira biosimilars already Food and Drug Administration-approved. First quarter sales of Humira grew 7.1 percent to $3.215 billion in the U.S., but fell 23 percent to $1.231 billion internationally due to biosimilar competition.
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Allergan’s overall sales in the first quarter were $3.6 billion, down from $3.7 billion in first quarter 2018. The company’s shares fell more than 4 percent following the earnings announcement.
In a bid to protect its patent on Restasis, Allergan tried in 2017 to employ a novel move, whereby it transferred the patents for the drug to the Saint Regis Mohawk, a Native American tribe in northern New York, which would then license it back to the company in exchange for upfront payments and royalties. The idea was that, because federally recognized tribes are sovereign entities, the Saint Regis Mohawk could petition the Patent Trial and Review Board to dismiss an Inter Partes Review challenging the patents that had been filed by generic drugmakers Mylan and Akorn. However, a federal court dismissed the move last year, and in April, the Supreme Court rejected a petition from the company and the tribe to hear the case.
The news follows BMS’ announcement Monday that it would divest Celgene’s psoriasis drug Otezla (apremilast), which had sales of $1.6 billion, in order to satisfy Federal Trade Commission concerns about competition from psoriasis drugs in its own pipeline. The two companies announced the $74 billion deal in January.
Photo: Allergan