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Allergan Focus on Brands, Biosimilar Products & Acquisitions


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We issued an updated research report on Allergan plc (AGN - Analyst Report) on Sep 28.

Allergan is reshaping its portfolio through acquisitions/divestitures. Allergan has been pretty active on the acquisition front. With the Allergan, Inc. takeover, the company finds itself among the top 10 pharmas worldwide, based on sales. On the other hand, it sold the generics business to Teva and announced an agreement to sell its Anda distribution business to the latter (transaction is expected to close this year).

As a result, the drugmaker can now focus on the branded segment and use the proceeds to buy back shares, pay down debt and pursue additional deals. The company has more than 65 projects in mid-to-late stage development. The company is also working on expanding the labels of marketed products like Botox, Linzess and Restasis among others. Focus is on core therapeutic areas like Eye Care, Aesthetics, CNS, GI, Anti-infectives, Women's Health and Urology.

In-fact, Allergan has been in the news lately for the string of buyouts it has announced this month. It announced a definitive deal to acquire Tobira Therapeutics, Inc. (TBRA - Snapshot Report) , a clinical-stage biotechnology company focused on making drugs to treat non-alcoholic steatohepatitis (NASH) and other liver diseases at a massive premium of 500%. On the same day, Allergan also announced that it has bought privately held Akarna Therapeutics for $50M in upfront cash plus unspecified milestones. Akarna Therapeutics’ lead product candidate AKN-083, a preclinical-stage FXR agonist, is also being evaluated for the treatment of NASH.

Earlier this month, Allergan announced that it will be acquiring clinical-stage biotech company, Vitae, for approximately $639 million. The acquisition, scheduled to close by year end, will see Allergan boosting its dermatology pipeline. Allergan also announced the acquisition of RetroSense Therapeutics, a privately held, clinical-stage biotechnology company, which will add the latter’s lead gene therapy development program RST-001 to Allergan’s eye care pipeline.

Biosimilars also represent significant opportunity for Allergan. In Dec 2011, Allergan and Amgen, Inc. (AMGN - Analyst Report) entered into a collaboration agreement for the worldwide development and commercialization of oncology antibody biosimilars. The products developed under the collaboration will be sold under a joint Amgen/Allergan label. Allergan and Amgen are developing biosimilar versions of Roche Holding AG’s (RHHBY - Analyst Report) oncology drugs Avastin (non-small cell lung cancer) and Herceptin (breast cancer) which are in phase III development.

However, the company is facing generic threat for its key drug Namenda IR as generic versions of the key drug have entered the market. Allergan was looking to stop selling Namenda IR, in order to accelerate the switching of patients to Namenda XR, prior to the entry of IR generics. But it faced a hitch in its plans with a court requiring the company to continue selling the IR version. Namenda IR sales will be severely impacted now that generics have entered the market. Moreover, Namzaric sales are yet to pick up.

Namenda XR is approved for the treatment of moderate-to-severe dementia of the Alzheimer's type. Namzaric is a once-daily, fixed-dose combination of Namenda XR and Aricept (donepezil hydrochloride, an acetylcholinesterase inhibitor).

Allergan is also facing patent challenges for some of the other products in its branded portfolio including Generess Fe, Restasis apart from Namenda XR. Other products like Bystolic, Linzess and Viibryd are all slated to lose exclusivity over the next few years.

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