The company is paying $21 per share in cash for Vitae, whose stock jumped to $20.89 in premarket trading from $8.10 at Tuesday’s close.
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The all-cash deal comes to a total of $639 million, and was unanimously approved by both companies’ boards, and AGN stock is now up almost 3% on the news.
Allergan buys into the Fort Washington, PA-based biotech’s dermatology pipeline that includes VTP-43742, a midstage, first-in-class, orally active RORγt (retinoic acid receptor-related orphan receptor gamma) inhibitor for the potential treatment of psoriasis, as well as other autoimmune disorders. For the most part, Allergan has grown from a small biotech to a major player by tacking on late-stage products and already-marketed compounds through acquisition and licensing deals. The biotech firm now offers products that address issues ranging from the central nervous system and gastroenterology to eye care and dermatology.
Vitae is now experimenting with a treatment for psoriasis, which affects 7.5 million in America.
Jeff Hatfield, president and CEO of Vitae, said: “Allergan has a long track record in developing and commercialising innovative dermatologic treatments”. The specialty of Vitae’s research and development (R&D) team has helped it stand out, and make first-in-class treatments for such challenging diseases.
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The deal is subject to customary closing conditions and antitrust approval and is expected to close by the end of the year.
