Allergan's Kythera to Slash 117 Jobs After Merger is Completed

October 15, 2015
By Alex Keown, BioSpace.com Breaking News Staff

LOS ANGELES – Two weeks after being acquired by Ireland-based Allergan Inc. , Westlake Village-based Kythera Biopharmaceuticals, Inc. will lay off 117 employees, the San Fernando Valley Business Journal reported Tuesday night.

The layoffs, which are expected to occur by Nov. 30, will reduce the company by more than 50 percent, according to the report. Prior to the layoffs, the company had 212 full-time employees.

In June, Allergan struck a deal to acquire Kythera, which is focused on treatments for double chins and male pattern baldness, for $2.1 billion. When striking the deal, Brent Saunders, chief executive officer of Allergan, said the acquisition of Kythera “is a strategic investment that strengthens our leading global position in aesthetics and continues to position us for long-term growth.” The merger coupled Kythera’s injectable treatment for turkey neck with Allergan’s blockbuster Botox. Sales of Botox were about $2 billion last year, one third of Allergan’s annual revenues and an increase of about 10 percent over sales in 2013.

In April, the U.S. Food and Drug Administration approved Kybella, a pharmaceutical treatment for “submental fullness” manufactured by Kythera. Kybella is a formulation of synthetically-derived deoxycholic acid, which destroys fat under the chin, leaving surrounding tissue largely unaffected. Kybella is different from other facial injectables such as Allergan’s Botox, which smooths out wrinkles in skin. Kybella is administered by injections into the fat under the chin, tailored to the treatment goals of the patient and the physician. Each in-office treatment session is typically 15-20 minutes. Many patients experienced visible results in two to four treatments. Up to six treatments may be administered. Once the aesthetic response is achieved, retreatment is not expected, the company said.

“Kybella is a game-changing product in facial aesthetics, and builds on our leadership in the facial aesthetics market. We now can provide a broader range of market-leading aesthetics products to our customers, with Kybella joining Botox Cosmetic, Juvederm XC, Juvederm Voluma XC and Latisse,” Saunders said in a statement following the completion of the acquisition.

Saunders added that Kybella is a product that he has used and said that it will be a strong product in the aesthetic treatment of men.

According to 2014 statistics released by the American Society for Aesthetic Plastic Surgery, Americans spend more than $12 billion on both surgical and non-surgical procedures annually. Turkey neck is a difficult to remove pocket of fat for even the most physically fit of individuals. George J. Hruza, president of the American Society for Dermatologic Surgery, said a consumer survey conducted by the ASDS revealed 68 percent of consumers are bothered by fullness under their chin.

Over the past year, Allergan has laid off more than 1,000 employees in California, the Journal reported.

Allergan is in the process of streamlining operations following its merger with Actavis PLC earlier this year. 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.