Allergan PLC agreed to acquire Tobira Therapeutics Inc., a biopharmaceutical company that develops therapies for liver diseases, in a deal the companies said potentially is worth roughly $1.7 billion.

Allergan will make an upfront payment of $28.35 a share in cash, a high premium to Tobira's Monday closing price of $4.74 a share. Tobira holders also will receive one contingent value right to receive as much as $49.84 a share linked to certain development and regulatory milestones.

Tobira's shares surged to $32.75 in recent premarket trading.

With the deal, expected to close by year's end, Allergan gains Tobira's lead product candidate cenicriviroc for the treatment of nonalcoholic steatohepatitis, or NASH, a common liver disease associated with obesity and type-2 diabetes. Allergan also will gain another investigational NASH treatment, evogliptin, which is in early phase studies.

"With the increasing rates of diabetes, obesity and other metabolic conditions in the U.S. and in developed nations globally, NASH is set to become one of the next epidemic-level chronic diseases we face as a society," Allergan Chief Executive Brent Saunders said in prepared remarks.

Both investigational treatments can make a significant impact in treating NASH, a disease that has no approved treatments available, Allergan chief research-and-development officer, David Nicholson, said in prepared remarks.

Write to Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

September 20, 2016 09:35 ET (13:35 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
Allergan (NYSE:AGN)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Allergan Charts.
Allergan (NYSE:AGN)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Allergan Charts.