Date: 2015-10-01
Type of information: Company acquisition
Acquired company: Kythera Biopharmaceuticals (USA - CA)
Acquiring company: Allergan (Ireland)
Amount: $2.1 billion
Terms: * On October 1, 2015, Allergan announced that it has successfully completed the acquisition of Kythera Biopharmaceuticals, a company focused on the discovery, development and commercialization of novel prescription products for the medical aesthetics market. Allergan acquired Kythera in an all-cash transaction valued at approximately $2.1 billion . * On August 5, 2015, Allergan and Kythera Biopharmaceuticals announced that they have amended and restated their merger agreement with respect to Allergan's pending acquisition of Kythera to provide for all-cash consideration to Kythera's stockholders. The agreement amends and restates the original merger agreement entered into by the parties on June 17, 2015, as amended on July 1, 2015. Pursuant to the amended and restated agreement, Allergan and Kythera have agreed to revise the structure of their previously announced transaction to provide that the $75 per share merger consideration to be paid to Kythera stockholders will be paid entirely in cash, instead of 80% cash and 20% stock as provided for under the original agreement. The other terms of the amended and restated agreement are substantially similar to those in the original agreement. * On July 27, 2015, Allergan and Kythera Biopharmaceuticals announced that the U.S. Federal Trade Commission (FTC) has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) with respect to Allergan's pending acquisition of Kythera. The early termination of the waiting period under the HSR Act satisfies one of the conditions to the closing of the pending acquisition, which remains subject to other customary closing conditions, including receipt of approval by KYTHERA's stockholders. * On June 17, 2015, Allergan, a leading global pharmaceutical company, and Kythera Biopharmaceuticals, a biopharmaceutical company focused on the discovery, development and commercialization of novel prescription products for the aesthetic medicine market, announced that they have entered into a definitive agreement under which Allergan has agreed to acquire Kythera in a cash and equity transaction valued at $75 per KYTHERA share, or approximately $2.1 billion, subject to the fulfillment of certain customary conditions summarized below. The fixed-value transaction consideration will be payable 80 percent in cash and 20 percent in new AGN shares issued to Kythera shareholders. Allergan's 2015 earnings-per-share forecast provided on May 11, 2015 is unchanged as a result of the acquisition. The acquisition is expected to be breakeven in 2016 and accretive thereafter. The Company remains committed to de-levering to below 3.5x debt to Adjusted EBITDA by the end of the first quarter of 2016. Allergan's acquisition of Kythera is subject to approval by the shareholders of Kythera, expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and fulfillment of certain other customary conditions to closing. Pending such approvals and fulfillment of other conditions, Allergan currently anticipates closing the transaction in the third quarter of 2015. J.P. Morgan is serving as financial advisor to Allergan and Covington & Burling LLP is serving as Allergan's lead legal counsel. Goldman Sachs is serving as financial advisor to Kythera and Latham & Watkins LLP is serving as Kythera's lead legal counsel.
Kythera also recently announced the submission of a Marketing Authorization Application (MAA) in the European Union (EU), seeking approval for ATX-101 (deoxycholic acid) injection as a treatment for the reduction of submental fat when the presence of submental fat has a psychological impact for the patient. Additionally, Allergan will pursue the relevant clinical trial requirements and the regulatory pathways to license and commercialize this treatment in other countries.
The acquisition also adds Kythera's development product setipiprant (KYTH-105), a novel compound for the prevention of androgenetic alopecia (AGA), or male pattern hair loss, as well as additional early-stage development candidates. Kythera has submitted an Investigational New Drug Application (IND) to the FDA for setipiprant for the treatment of AGA. Allergan plans to conduct a human proof-of-concept study to evaluate the efficacy and safety of setipiprant in male subjects with AGA.
Allergan and Kythera anticipate that the all-cash transaction provided for under the amended and restated agreement can be completed more quickly than the cash and stock transaction provided for under the terms of the original agreement. Allergan currently anticipates closing the transaction in the third quarter of 2015.
Details: The acquisition of Kythera immediately enhances Allergan's global facial aesthetics portfolio with the addition of Kybella™ (deoxycholic acid) injection, the first and only approved non-surgical treatment for contouring moderate to severe submental fullness, commonly referred to as double chin. Kybella™ was approved by the FDA on April 29, 2015. Kybella™ injection is also being developed for potential introduction into international markets. Kythera has submitted Kybella™ injection for regulatory approval in Switzerland, Canada and Australia, with other market applications to follow. The acquisition will also add Kybella's development product setipiprant (KYTH-105), a novel compound for the prevention of male pattern baldness, as well as additional early-stage development candidates.
Related: aesthetic medicine
