The acquisition was completed at a price of $28.35, a 500% premium on Tobira’s closing price of $4.74 per share.
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Ultimately, this acquisition will add Cenicriviroc (CVC) and Evogliptin, two differentiated, complementary development programs for the treatment of the multi-factorial elements of nonalcoholic steatohepatitis (NASH), including inflammation, metabolic syndromes and fibrosis, to Allergan’s global gastroenterology research and development pipeline.
More than 6.65 million shares of Conatus, a San Diego-based biotechnology company, have traded hands so far today vs. the 30-day average volume of about 268,000 shares.
Tobira’s shares surged 575 per cent to US$32 premarket on Tuesday. It could add up to a total of $1.695 billion.
NASH, which occurs in up to 5 per cent of Americans, is a silent liver disease that resembles alcoholic liver disease, but occurs in people who drink little or no alcohol.
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He said experimental NASH drugs being developed by Gilead Sciences Inc GILD.O have similar sales potential and that treatments being studied by Intercept Pharmaceuticals Inc ICPT.O and others also have blockbuster sales potential.
In April, only a day after Pfizer (PFE)’s attempted merger with Allergan was dashed by new U.S. Treasury Department rules regarding tax inversions, Allergan entered into a deal with Heptares Therapeutics, a wholly-owned subsidiary of Sosei Group Corporation.
The extraordinary premium is even more surprising considering the failure of cenicriviroc in an earlier NASH study, although the company said the primary endpoint would not be required to support a marketing application.
According to the National Institute of Diabetes and Digestive and Kidney Diseases, NASH affects 2 to 5 percent of people in the U.S. There are now no specific treatments aside from weight loss, increased physical activity, and avoiding alcohol and unnecessary medications.
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Allergan plc (AGN) and Tobira Therapeutics, Inc. Centerview Partners and Citi are Tobira’s financial advisers, while Skadden, Arps, Slate, Meagher & Flom LLP and Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP are its legal counsel.
