Allergan said Tuesday it had agreed to acquire Tobira Therapeutics for up to $1.7 billion, joining other big drugmakers in the high-stakes race to develop treatments for a liver disease associated with obesity and diabetes. That deal was worth $50 million up-front. Cantor Fitzgerald Initiated Tobira Therapeutics Inc on Jul 6, 2016 to “Buy”, Price Target of the shares are set at $27. These play a role in the inflammatory and fibrogenic pathways in NASH that lead to liver damage, cirrhosis, or liver failure. 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. Its lead program is an FXR agonist for the treatment of non-alcoholic steatohepatitis (NASH), which is now in preclinical, IND-enabling toxicology and safety pharmacology studies. It agreed on September 6 to pay US$60 million for RetroSense, a privately held company developing an ophthalmology gene therapy. NASH could soon be the leading cause of liver transplants in the U.S. Tobira said the drug has potential to be approved if that favorable secondary finding can be duplicated in a larger late-stage study, which it plans to begin next year.
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Allergan, headquartered in Dublin, Ireland, will pay $28.35 per share in cash and “up to” $49.84 per share “that may be payable based on the successful completion of certain development, regulatory and commercial milestones”, Allergan said.
The acquisition puts Allergan in a race to market with other FXR-targeting drugs for NASH, including Intercept Pharma which has a drug with mechanism already on the market for another indication, as well as Gilead Sciences and Phenex. The shares ended last trade at $38.91, implying that Wall Street analysts see shares losing about -51.17 per cent in 12 months’ time.
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The four drug companies with NASH products saw sharp gains Tuesday following news of the Tobira deal. In the announcement of the most recent deals, Allergan seemed to hint that more deals might be in the pipeline. Centerview Partners and Citi are serving as financial advisors to Tobira and Skadden, Arps, Slate, Meagher & Flom LLP and Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP are serving as Tobira’s legal counsel.
