Allergan Forks Over $125 Million+ for Bay Area Medtech Firm Oculeve
July 6, 2015
By Alex Keown, BioSpace.com Breaking News Staff
SOUTH SAN FRANCISCO – Allergan PLC is backing up dry eye treatment drug Restasis by adding another dry eye care treatment to its portfolio with the $125 million-plus acquisition of U.S. –based Oculeve, a development-stage medical device company, the company announced this morning.
The acquisition was classified as an all-cash transaction, which includes $125 million in upfront payments and undisclosed milestone payments related to Oculeve's lead dry eye development treatment OD-01, a non-invasive nasal neurostimulation device that increases tear production in patients with dry eye disease. Oculeve has completed four clinical studies of OD-01 to date in more than 200 patients, showing positive safety and efficacy of the device. Allergan plans to conduct two additional pivotal trials prior to FDA submission, which is expected in 2016 with potential commercial launch in 2017.
Allergan’s stock was up following the announcement of the acquisition. The stock was trading at $307.51 per share this morning. Its previous close was $306.51.
The deal with startup Oculeve , founded by Michael Ackermann and backed by seed money from Kleiner Perkins Caufield and Byers, comes on the heels of the finalization of Allergan PLC’s formation out of the merger of Actavis plc and Allergan Inc. already manufactures a number of eye care treatments, including the over-the-counter Refresh Tears lubricant and prescription-level Restasis for dry eye treatment.
Ackermann, president and chief executive officer of Oculeve, said coming under the Allergan umbrella will “maximize the development and potential commercialization of the OD-01 technology.”
“The OD-01 program has been shown to provide a strong safety and efficacy profile, and if approved, would provide an exciting new treatment option for patients that is complementary to our existing product offerings in this important treatment area,” David Nicholson, Executive Vice President, Global Brands Research and Development at Allergan, said in a statement.
The Allergan/ Oculeve deal also includes the acquisition of an additional earlier-stage dry eye device development program.
Chronic dry eye, which is estimated to affect 25 million people in the United States, is a disease that can be caused by advanced age, contact lens wear, certain medications, eye diseases, other medical conditions or environmental factors. Without enough tears, the film protecting the eye can break down, creating dry spots on the cornea. One type of chronic dry eye is caused by decreased tear production due to inflammation.
Allergan said it expects the deal with Oculeve to be finalized sometime in the third quarter of 2015. The transaction is subject to the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Allergan PLC officially launched last month, following the completion of the merger between Actavis plc and Allergan Inc. In November 2014 Actavis acquired Allergan for $66 billion in a combination of cash and stock. Under the terms, Actavis would pay a total of $219 a share with nearly 60 percent of the deal in cash and the rest in stock, Actavis said. Allergan had also been courted by Valeant Pharmaceuticals International, Inc. in a deal that reportedly went as high as $60 billion. Brent Saunders, chief executive officer of Allergan, had earlier said the company was still adjusting to merger, but would be interested in making smaller acquisitions throughout the year in order to expand the company’s pipeline.
Allergan spent $2.1 billion to acquire Kythera Biopharmaceuticals, Inc. , a company focused on drugs treating double-chins and male pattern baldness. Kythera’s Kybella injection for double chin treatment, was approved by the U.S. Food and Drug Administration in April. It is also being submitted for approval in Switzerland, Canada and Australia, as well as other markets. Kythera also has a compound in early-stage development for male pattern baldness, KYTH-105.
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