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Allergan to Buy LifeCell to Boost Regenerative Medicine Suite
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Allergan plc announced that it has signed a definitive agreement to acquire LifeCell, the regenerative medicine unit of Texas-based privately held company Acelity for $2.9 billion in cash.
Allergan’s share price was up 1.3% in the past one month, outperforming the 0.6% increase for the Zacks classified Medical-Generics Drug industry.
Coming back to the latest deal, we believe that the acquisition of LifeCellwill be a synergistic fit for Allergan. The deal brings together LifeCell’s regenerative tissue products, which are used in breast reconstruction procedures and complex hernia surgeries, and Allergan’s medical aesthetics, breast implants and tissue expanders, thereby enhancing the latter’s plastic and general surgery product portfolio. In addition, Allergan will acquire LifeCell's manufacturing capabilities and R&D operations. LifeCell is expected to garner revenues of $450 million, gross margin of approximately 75% and operating margin of approximately 40% in 2016. The transaction is expected to close in the first quarter of 2017.
Note that acquisitions are an integral component of Allergan’s expansion strategy.
This year, the drugmaker has made a string of buyouts. The Tobira Therapeutics acquisition gave it global rights to Tobira’s lead pipeline candidates, Cenicriviroc (CVC) and Evogliptin. Both of them are highly differentiated compounds being developed to treat multi-factorial elements of NASH, including inflammation, metabolic syndromes and fibrosis, thereby strengthening Allergan’s focus on this growing space. Allergan also bought privately held Akarna Therapeutics, whose lead product candidate, AKN-083, is a preclinical-stage FXR agonist being evaluated for the treatment of NASH. Moreover, the acquisition of clinical-stage biotech company Vitae saw Allergan boosting its dermatology pipeline. Allergan also bought private clinical-stage biotechnology companies, RetroSense Therapeutics and ForSight VISION 5, bolstering its eye care pipeline. In addition, Allergan took over Chase Pharmaceuticals Corporation, which focuses on the development of treatments for Alzheimer's disease.
On the other hand, Allergan sold its generics and Anda distribution business to Teva Pharmaceutical Industries Limited (TEVA - Free Report) in Aug and Oct 2016, respectively. However, in April, Allergan’s $160 billion deal to sell itself to pharma giant Pfizer, Inc. (PFE - Free Report) fell through.
Heska’s earnings estimates improved 19.5% for 2016 and 10.9% for 2017 over the last 60 days. The company posted a positive earnings surprise in each of the four trailing quarters, with an average beat of 301.64%. Its share price has increased 80.5% year to date.
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Allergan to Buy LifeCell to Boost Regenerative Medicine Suite
Allergan plc announced that it has signed a definitive agreement to acquire LifeCell, the regenerative medicine unit of Texas-based privately held company Acelity for $2.9 billion in cash.
Allergan’s share price was up 1.3% in the past one month, outperforming the 0.6% increase for the Zacks classified Medical-Generics Drug industry.
Coming back to the latest deal, we believe that the acquisition of LifeCellwill be a synergistic fit for Allergan. The deal brings together LifeCell’s regenerative tissue products, which are used in breast reconstruction procedures and complex hernia surgeries, and Allergan’s medical aesthetics, breast implants and tissue expanders, thereby enhancing the latter’s plastic and general surgery product portfolio. In addition, Allergan will acquire LifeCell's manufacturing capabilities and R&D operations. LifeCell is expected to garner revenues of $450 million, gross margin of approximately 75% and operating margin of approximately 40% in 2016. The transaction is expected to close in the first quarter of 2017.
Note that acquisitions are an integral component of Allergan’s expansion strategy.
This year, the drugmaker has made a string of buyouts. The Tobira Therapeutics acquisition gave it global rights to Tobira’s lead pipeline candidates, Cenicriviroc (CVC) and Evogliptin. Both of them are highly differentiated compounds being developed to treat multi-factorial elements of NASH, including inflammation, metabolic syndromes and fibrosis, thereby strengthening Allergan’s focus on this growing space. Allergan also bought privately held Akarna Therapeutics, whose lead product candidate, AKN-083, is a preclinical-stage FXR agonist being evaluated for the treatment of NASH. Moreover, the acquisition of clinical-stage biotech company Vitae saw Allergan boosting its dermatology pipeline. Allergan also bought private clinical-stage biotechnology companies, RetroSense Therapeutics and ForSight VISION 5, bolstering its eye care pipeline. In addition, Allergan took over Chase Pharmaceuticals Corporation, which focuses on the development of treatments for Alzheimer's disease.
On the other hand, Allergan sold its generics and Anda distribution business to Teva Pharmaceutical Industries Limited (TEVA - Free Report) in Aug and Oct 2016, respectively. However, in April, Allergan’s $160 billion deal to sell itself to pharma giant Pfizer, Inc. (PFE - Free Report) fell through.
ALLERGAN PLC Price and Consensus
ALLERGAN PLC Price and Consensus | ALLERGAN PLC Quote
Allergan carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is Heska Corporation with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Heska’s earnings estimates improved 19.5% for 2016 and 10.9% for 2017 over the last 60 days. The company posted a positive earnings surprise in each of the four trailing quarters, with an average beat of 301.64%. Its share price has increased 80.5% year to date.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>