Allergan buys another NASH biotech, Arkarna, in September M&A spree

Within the same day that Allergan ($AGN) announced a $1.7 billion buyout of tiny NASH biotech Tobira ($TBRA), the Botox maker announced it had bought yet another fatty liver disease company, although for far less and for a much earlier stage candidate.

Allergan said in a statement that it will pay $50 million upfront for private biotech Akarna Therapeutics, with other milestone payments set to be added on top.

It gains for its relatively small upfront fee access to AKN-083, a preclinical farnesoid X receptor (FXR) agonist in early development for the treatment of NASH.

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This will sit at an earlier stage in its brand-new NASH pipeline, which on the same day also saw Allergan gain access to both a Phase III and a Phase I candidate from its Tobira buyout.

The company said its preclinical candidate could be “complementary” to its other new meds, although many questioned the price it paid for Tobira, which had a market cap of less than $100 million before the deal.

On top of AKN-083, this deal also includes a portfolio of additional development-stage FXR compounds.

FXR is a nuclear hormone receptor expressed in the liver, intestine, kidney and fat. FXR has become a target of increasing interest to biotech and pharma companies over the past decade given its role as a master regulator of carbohydrate and lipid metabolism, bile-acid homeostasis, inflammation and fibrosis--all of which are associated with NASH.

Earlier this year, San Diego and Cambridge, England-based Akarna raised $15 million in a Series B round, with investors including Forbion Capital Partners, New Science Ventures and Third Point Ventures.

"The acquisition of Akarna adds to our strategic approach to investing in innovation to advance the treatment of NASH for millions of patients who currently do not have therapeutic options to treat the disease," said Brent Saunders, CEO and president of Allergan.

"We look forward to advancing this unique compound into later stages of development, and to advancing our overall portfolio of NASH programs, as we focus on bringing forward effective treatments for this critical disease area." 

David Nicholson, chief R&D officer at Allergan, added: "AKN-083 is a highly differentiated, selective FXR agonist which is a strongly validated therapeutic mechanism for the treatment of NASH. In addition, AKN-083 is a non-bile acid FXR agonist that in preclinical studies has shown high affinity, potency and selectivity with a better tolerability profile. These characteristics make AKN-083 a great addition to our portfolio of assets for the treatment of NASH."

So far this month, Allergan has almost on its own kept up biotech M&As, seeing a $60 million upfront asset deal with gene therapy specialist RetroSense; a $639 million buyout of small-cap dermatology biotech Vitae; and then the up to $1.7 billion acquisition of Tobira and the $50 million upfront for Akarna this week.

The company has felt the weight of its wallet since selling off its generics to Teva ($TEVA) for over $40 billion (which includes a 10% ownership in the Israeli generics giant) in July, although it still has a substantial amount of debt tied to the company.

Allergan ended the day 2.7% down at the end of normal trading but nudged up 0.56% afterhours. 

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