Allergan buys two liver drug makers in a day

Before the market opened on Tuesday, Allergan said it would buy Tobira Therapeutics for $1.7 billion; later, it announced a $50 million deal to buy Akarna Therapeutics


In less than 12 hours on Tuesday, Allergan Plc announced a pair of acquisitions of firms developing treatments for a liver disease.
In less than 12 hours on Tuesday, Allergan Plc announced a pair of acquisitions of firms developing treatments for a liver disease.

Boston: Allergan Plc is on a shopping spree.

In less than 12 hours on Tuesday, the drug maker announced a pair of acquisitions of firms developing treatments for a liver disease known as NASH, giving the firm a ready-made pipeline in one of biotechnology’s hottest areas.

Before the market opened on Tuesday, Allergan said it would buy Tobira Therapeutics Inc. for as much as $1.7 billion, gaining the company’s experimental drugs for NASH, or non-alcoholic steatohepatitis.

Then, after the market closed, it announced a $50 million deal to buy Akarna Therapeutics Ltd, which is also developing NASH treatments.

Allergan seemed to suggest in the morning announcement that more deals might be coming, said Elizabeth Krutoholow, an analyst with Bloomberg Intelligence, but “I don’t think anyone thought it would happen that quickly,” she said by telephone.

“That’s crazy.”

The Tobira deal, with its 498% premium compared with the firm’s closing stock price a day before, confirms the desire by drug makers to acquire treatments for the disease.

NASH affects 2-5% of Americans, and is becoming more common as obesity rates rise, according to the US National Institutes of Health. In severe cases, it can necessitate a liver transplant.

For Tobira, Allergan will pay $28.35 a share in cash upfront and up to $49.84 per share if Tobira hits certain sales and regulatory goals, according to a statement on Tuesday. The lower price values Tobira at about $533 million based on the number of shares outstanding, almost six times its market capitalization of $89 million as of Monday’s close. Akarna got $50 million upfront, and may get additional payments depending on how its drug progresses.

In a tweet, Allergan chief executive officer Brent Saunders said the firm was “building a best in class R&D pipeline and bringing innovation to an unmet need in NASH.”

Tobira’s lead drug candidate, called cenicriviroc, is designed to tamp down two proteins involved in boosting the immune system’s response in the liver, ultimately leading to the inflammation and liver scarring seen in NASH.

Akarna’s experimental drug, which according to the company’s website has not yet been tested in people, is targeted at a protein called FXR that’s involved in the fat buildup that can lead to NASH.

Allergan has been on a shopping spree for small and mid-sized assets. Bloomberg

Katherine Doherty contributed to this story.

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