Allergan in $640M Vitae buyout deal as it further expands dermatology pipeline

Allergan ($AGN) has continued on its post-Pfizer ($PFE) deal-that-never-was M&A spree with a $639 million deal to acquire small cap dermatology biotech Vitae Pharmaceuticals ($VTAE).

The deal, worth $21 a share, is a major premium on the $8 a share it was trading on last night before the acquisition was announced, when it had a market cap of $238 million.

Allergan buys into the Fort Washington, PA-based biotech’s dermatology pipeline that includes VTP-43742, a midstage, first-in-class, orally active RORγt (retinoic acid receptor-related orphan receptor gamma) inhibitor for the potential treatment of psoriasis, as well as other autoimmune disorders.

It will also gain access to VTP-38543, a topical LXRβ (Liver X Receptor beta) selective agonist for the potential treatment of atopic dermatitis.

Vitae believes that VTP-38543, also in Phase II, works by decreasing inflammation in damaged skin tissue and repairing the damaged outer layer of skin.

"Both the VTP-43742 and VTP-38543 programs offer the potential for highly differentiated mechanisms of action for the treatment of dermatologic conditions where patients are underserved by currently approved treatments," said David Nicholson, chief research and development officer, Allergan.

“In addition, Vitae's novel Contour drug discovery platform and its team, which have been instrumental in the discovery of novel 'difficult to drug' compounds, will be highly complementary to Allergan's existing R&D discovery efforts in key therapeutic areas.”

Brent Saunders, CEO and president of Allergan, added that: “The acquisition of Vitae is a strategic investment for Allergan that adds strength and depth to our innovative medical dermatology franchise.”

This includes the recent $90 million it paid out at the start of the year to get its hands on a topical Botox project, as well as a deal struck in April to buy the topical dermatology company Topokine. Earlier this year, Pfizer dropped its $100 billion-plus bid to buy Allergan as the company pivoted back to its traditional deal-making ways under Saunders.

The company currently has a mid-to-late stage pipeline of more than 70 programs.