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| Allergan CEO Brent Saunders |
Actavis may have changed its name to Allergan ($AGN) this week, but nothing has changed about its penchant for dealmaking. The newly bulked-up pharma struck again Wednesday, inking a pact for Kythera Biopharmaceuticals ($KYTH).
Allergan will shell out $75 per Kythera share in a cash-and-stock deal worth about $2.1 billion, the company said Monday, and it expects the deal to start padding EPS in 2017.
"I am perfectly OK with that," Evercore ISI analyst Umer Raffat wrote in a note to clients. "In fact, deals like this validate a long-term growth thesis for Allergan."
The Dublin drugmaker is thinking the same thing. The new pickup will strengthen Allergan in aesthetics, adding chin-fat-reducer Kybella to a facial portfolio that already includes products like Botox, Juvederm, Latisse and Skinmedica. And it'll also provide a "pivotal entry point" for expanding the use of facial aesthetics in men, Allergan CEO Brent Saunders pointed out in a statement.
The tie-up will also help propel Allergan toward some big-time goals, which include compound annual growth of 10% for its branded drug business. That's an area in which the company--at one time a generics-focused drugmaker--has substantially bulked up as of late, following up a 2014 deal for Forest Labs with the mammoth transaction that turned Actavis into Allergan.
But the Irish pharma hasn't shunned its roots; it's been beefing up on the generics side, too. Not long after inking the Allergan pact, the company snapped up U.K. copycat drugmaker Auden McKenzie for £306 million in cash, plus royalties.
- read Allergan's release
Special Reports: Pharma's top 10 M&A deals of 2014 - Actavis/Allergan - Actavis/Forest Laboratories | Top 10 generics makers by 2012 revenue - Actavis | The 25 most influential people in biopharma in 2015 - Brent Saunders - Actavis