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AbbVie (ABBV) Inks Deal to Acquire Medical Device Company

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Allergan Aesthetics, a wholly owned subsidiary of AbbVie Inc. (ABBV - Free Report) announced that it has entered into a warrant agreement with Chicago-based privately held medical device company, Cypris Medical.

Upon completion of a clinical study, which is to be initiated in the ongoing year, Allergan Aesthetics will have an option to acquire Cypris Medical as well as the latter’s Xact device, which is a minimally invasive alternative option for performing face and neck lifts.

Per the press release, Allergan Aesthetics and Cypris Medical will partner to conduct the study, which will evaluate the safety and effectiveness of Xact in treating midface descent as well as for neck lifts. Notably, Xact’s innovative technology provides patients surgery-like results but in a minimally invasive manner and without use of the scalpel.

Shares of AbbVie have rallied 24.4% in the past year compared with the industry’s increase of 4.7%.

price chart for ABBV


The above deal, if successful, is likely to diversify AbbVie’s facial aesthetics portfolio, which already includes non-invasive treatment options like Botox Cosmetic and the Juvederm Collection of fillers.

We note that AbbVie completed the acquisition of Allergan in May 2020, which added the latter’s blockbuster product, Botox, to its portfolio. Moreover, the acquisition significantly expanded and diversified AbbVie’s revenue base with new therapeutic areas, enhancing its long-term growth potential.

Notably, in the first nine months of 2020, the Aesthetics portfolio generated revenues of $1.4 billion, reflecting a decrease of 23% year over year on comparable operational basis. Botox Cosmetic contributed $619 million to the Aesthetics portfolio while the Juvederm Collection of filler recorded $387 million in the first nine months of 2020. Sales of both products declined due to the adverse effects of the COVID-19 pandemic.

However, in the third quarter of 2020, management stated that the aesthetics franchise experienced a faster-than-expected recovery from the COVID-19 pandemic while reflecting a significant pent-up demand.

Meanwhile, for full-year 2020, AbbVie expects global aesthetics sales of approximately $2.5 billion compared with $2.4 billion previously.

Zacks Rank & Stocks to Consider

AbbVie currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the drug/biotech sector include Alexion Pharmaceuticals, Inc. (ALXN - Free Report) , Ultragenyx Pharmaceutical Inc. (RARE - Free Report) and Halozyme Therapeutics, Inc. (HALO - Free Report) , all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Alexion’s earnings estimates have been revised 0.8% upward for 2021 over the past 60 days. The stock has rallied 38% in the past year

Ultragenyx’s loss per share estimates have narrowed 5% for 2021 over the past 60 days. The stock has surged 124.3% in the past year.

Halozyme’s earnings estimates have been revised 3.6% upward for 2021 over the past 60 days. The stock has skyrocketed 117.9% in the past year.

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