By Lisa Beilfuss
Botox maker Allergan PLC agreed to buy Kythera
Biopharmaceuticals Inc., which is preparing to launch an injection
aimed at reducing so-called double chins, for about $2.1 billion in
cash and stock.
Dublin-based Allergan will pay $75 a share for Kythera,
representing a 24% premium over Tuesday's closing price.
Kythera is about to launch Kybella, its injection to banish the
double chin. The treatment got approval from the U.S. Food and Drug
Administration in April. Chief Executive Keith Leonard has said
that Kybella will generate at least $500 million in domestic sales
and eventually match that level in international sales.
Allergan said Wednesday that the acquisition immediately
enhances Allergan's facial aesthetics portfolio with the addition
of Kybella.
Actavis acquired Allergan in a deal valued at $70.5 billion, the
biggest from 2014. The deal ended one of the year's more dramatic
takeover battles in which Dublin-based Actavis beat out Valeant
Pharmaceuticals International Inc. for Allergan.
Like Actavis's deal for Allergan, Allergan's deal for Kythera
will benefit in part from the acquirer using its lower-tax foreign
addresses as springboards for acquisitions in the U.S., which has
one of the world's highest corporate tax rates. This tax trend has
been particularly popular among drug deals.
Kythera has said it would begin its targeted rollout of Kybella
this month, starting with a small group of top dermatologists and
plastic surgeons, who would serve as "faculty" to train other
physicians. Mr. Leonard has said that Kybella would be more widely
available starting in August.
Kythera has said that the double chin, called submental fullness
in the medical community, is a common yet undertreated affliction
that affects men and women alike and is the result of both genetics
and weight.
The FDA in April approved Kybella to treat patients in up to six
sessions, at least a month apart. Patients will receive dozens of
shots per 15 to 20 minute session. Most patients will need four
sessions to obtain the desired outcome, Kythera has said.
Since going public in 2012, Kythera hasn't reported a
profit.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
Access Investor Kit for Valeant Pharmaceuticals International,
Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=CA91911K1021
Subscribe to WSJ: http://online.wsj.com?mod=djnwires