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Valeant offloads aesthetic treatments to Nestlé's derm unit in $1.4B deal

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Valeant CEO J. Michael Pearson

Valeant Pharmaceuticals ($VRX) CEO J. Michael Pearson is an aggressive buyer, especially when it comes to the fast-growing skincare field. Just Wednesday morning his company upped its bid for Botox-maker Allergan ($AGN). But Pearson was also a seller on Wednesday, shipping off rights to a handful of cosmetic products to Nestlé as the Swiss food group looks to expand into the dermatology space.

In exchange for $1.4 billion in cash, Nestlé will grab North American rights for antiwrinkle treatments Restylane, Perlane, Emervel and Dysport. The company already claims the ex-North American rights to those treatments, thanks to its March move to take full ownership of Galderma, a dermatology venture with L'Oreal. As part of the Valeant deal, Nestlé will also gain worldwide rights to another aesthetic med, Sculptra.

Galderma "not only has a history of building strong businesses, but is firmly committed to the aesthetic dermatology," Pearson said in a statement. "Galderma has already built a strong franchise with Restylane, Perlane, Dysport and Emervel outside North America and, with the addition of Sculptra, will now have the ability to bring their expertise to the U.S. and Canada."

For Nestlé, the pickup is part of an attempt to diversify beyond its signature food products. While it isn't a huge deal, in combination with the $3.6 billion Galderma buyout, it's a signal that "they are serious about expanding their business into the health sphere," Kepler Cheuvreux analyst Jon Cox told the Financial Times. "I would expect to see more acquisitions from them as they move further into the medical and health spectrum," he said.

While Valeant said the deal is not contingent on its wooing of Allergan, it could be just the beginning of a larger role reversal if the Canadian pharma is successful in that pursuit. As Reuters reported earlier this week, Valeant would consider a breakup if its serial acquisition strategy makes the company unwieldy.

And this deal may just help it get there, potentially clearing some antitrust hurdles that stand in the way of an Allergan merger. It "eliminated one more roadblock in terms of our integration with Allergan," Pearson said on a conference call Wednesday, as quoted by Bloomberg.

- read the release
- get more from the Financial Times (sub. req.)
- see Bloomberg's take here and here

Special Reports: The most influential people in biopharma - J. Michael Pearson, Valeant | Pharma's top 10 M&A deals of 2013 - Valeant/Bausch + Lomb

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