Amid its fight to stave off a hostile takeover, Botox maker Allergan ($AGN) is making a buy of its own, trading up to $587.5 million for a midstage bladder drug from the biotech Taris.
Under the deal, Allergan gets worldwide rights to Liris, a Phase II drug-device combo designed to treat interstitial cystitis, or painful bladder syndrome. The company paid $67.5 million up front and is on the line for another $295 million in development milestones and as much as $225 million tied to commercial performance.
Liris works by continuously delivering the anti-inflammatory drug lidocaine through a small implanted tube feeding directly into the bladder. The technology stems from the labs of MIT's prolific entrepreneurs Michael Cima and Robert Langer, and its promise was enough to sway Polaris Venture Partners, Third Rock Ventures, Flybridge Capital Partners and Flagship Ventures, all of which participated in Taris' $12.5 million E round last year.
|Allergan CEO David Pyott|
For Allergan, the deal bolsters its pipeline in urology and builds off of the company's success in getting Botox approved as a second-line treatment for overactive bladder last year, CEO David Pyott said. The chief executive has long had his eye on expanding Allergan's prospects through M&A, telling FierceBiotech at January's J.P. Morgan Healthcare Conference that he had a $10 billion purse earmarked for takeovers.
Of course, that was before Valeant Pharmaceuticals ($VRX) came calling with a series of hostile offers, sparking a months-long back and forth that has led Allergan to re-evaluate its approach to R&D. Amid its suitor's accusations of bloated budgeting, Allergan has announced plans to cut 13% of its workforce--about 1,500 employees--and curtail its commitment to early-stage research. The two sides remain at an impasse, with Valeant and co-agitator Pershing Square Capital Management working to force a shareholder meeting and get Allergan to take their $48.7 billion offer.
As for Taris, selling off its top prospect will leave the company to focus on its preclinical assets in bladder cancer and overactive bladder, CEO Purnanand Sarma said. The biotech is also working alongside AstraZeneca ($AZN) on a separate bladder cancer program, pursuing multiple candidates under a 2013 agreement.
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