Back to top

Image: Bigstock

Allergan Acquires Chase Pharma, Expands CNS Portfolio

Read MoreHide Full Article

Allergan plc announced that it has acquired Chase Pharmaceuticals Corporation, a clinical-stage biopharmaceutical company that focuses on the development of treatments for Alzheimer's disease.

As per the terms of the agreement, Allergan provided an upfront payment of $125 million and is eligible to receive additional potential regulatory and sales milestone payments related to Chase's lead candidate, CPC-201.

CPC-201, a combination of Aricept (donepezil) and solifenacin, is anticipated to enter a phase III study in 2017, based on feedback from the FDA from the recently completed end of phase II meeting.

We are encouraged by the company’s efforts in expanding its CNS portfolio. Per data provided by Allergan in its press release, an estimated 45 million people are living with dementia across the world. Alzheimer’s disease accounts for 60% to 70% of dementia cases.

The market represents huge commercial potential and a successfully developed product could generate billions of dollars in sales once launched. We note that AstraZeneca PLC (AZN - Free Report) , in collaboration with Eli Lilly and Company (LLY - Free Report) is currently evaluating their experimental Alzheimer’s disease treatment candidate, AZD3293, in a phase III study. AZD3293 has a fast track status in the U.S.

Meanwhile, in a separate press release, Allergan announced that its XEN Glaucoma Treatment System, comprising XEN45 gel stent and XEN injector, has received FDA clearance. It is indicated for the management of refractory glaucomas, where previous surgical treatment has failed, or in patients with primary open angle glaucoma, and pseudoexfoliative or pigmentary glaucoma with open angles that are unresponsive to maximum tolerated medical therapy.

The company anticipates launching the XEN Glaucoma Treatment System in the U.S. early next year.  

We note that XEN enjoys the CE mark in the EU and is indicated for the reduction of intraocular pressure in patients with primary open-angle glaucoma who have failed previous medical treatments.

According to information provided by the company in its press release, 60.5 million people were living with glaucoma in 2010. Moreover, the company expects the number of people suffering from glaucoma to increase to nearly 80 million by 2020 due to the growing aged population.

Allergan currently carries a Zacks Rank #3 (Hold).

Stock to Consider

Vanda Pharmaceuticals, Inc. (VNDA - Free Report) is a better-ranked stock in the health care sector, with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Vanda’s loss estimates narrowed from 68 cents to 56 cents for 2016 over the last 60 days, while its earnings estimates increased from 16 cents to 17 cents for 2017. The company posted a positive earnings surprise in three of the last four quarters, with an average beat of 56.65%. Its share price has surged 80% year to date.

Zacks' Top Investment Ideas for Long-Term Profit

How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


AstraZeneca PLC (AZN) - free report >>

Eli Lilly and Company (LLY) - free report >>

Vanda Pharmaceuticals Inc. (VNDA) - free report >>