Allergan bets on branded drugs
28.07.2015 - Irish Allergan is bolstering its product pipeline with a takeover of CNS specialist Naurex. At the same time, the company is divesting its global generics business to Teva.
Naurex is a spin-out from the Northwestern University in Illinois, US that develops therapies for disorders of the central nervous system (CNS). Allergan will pay US$560m (€506m) for the US biopharma, US$460m (€416m) of which upfront, as well as milestone payments. In exchange, it can add Naurex’ anti-depression drug candidates to its pipeline. Both are targeted modulators of the N-methyl-D-aspartate receptor. Lead product rapastinel (GLYX-13) is a once-weekly intravenous molecule to treat depression that is set to start Phase III trials. NRX-1074, a next-generation drug candidate, has shown promise in intravenous form in Phase II and is being evaluated in Phase I when administered orally.
“The acquisition of Naurex is a great fit for Allergan and a compelling and exciting investment. We expect Naurex will enhance Allergan’s mental health portfolio and build on our strategy to lead in this important therapeutic area,” said Brent Saunders, CEO and President of Allergan.
The Dublin-based company also announced the divestment of its generics business to the world’s largest generics supplier Israeli company Teva Pharmaceutical Industries Ltd for US$40.5bn (€37bn). Subject of the deal is Allergan’s legacy – Actavis global generics business, including the US and international generic commercial units, third-party supplier Medis, global generic manufacturing operations, the global generic R&D unit, the international over-the-counter (OTC) commercial unit (excluding OTC eye care products) and some established international brands. Allergan will receive US$33.75bn (€30.5bn) in cash and US$6.75bn (€6.1bn) in Teva stock. In addition, Allergan retains 50 percent of Teva’s future economics from generic lenalidomide. “This transaction will accelerate Allergan’s evolution into a branded Growth Pharma leader, enable a sharpened focus on expanding and enhancing our global branded pharmaceutical business and strengthen our financial position to build on our proven track-record of value creation led by effective capital deployment,” said Brent Saunders, CEO and President of Allergan.
With part of the sale proceeds, the Irish company, formerly known as Actavis, means to pay off debt accumulated over the last few years, most recently with the US$66bn (€60bn) takeover of US company Allergan. Shortly after the acquisition, Actavis took on the name Allergan.
After the announcements, Allergan’s stock price rose to a record high of more than US$325 (€294) per share.