Allergan back on the acquisitions trail

Jilted at the altar by Pfizer earlier this year, effectively under the order of high priest President Barack Obama, dealmakers at Dublin-based Botox maker Allergan had to go back to the drawing board.

The company, which manufactures the wrinkle-busting treatment in a facility employing about 1,000 close to the foothills of Croagh Patrick on the outskirts of Westport, Co Mayo, has decided to embark on the acquisitions trail again.

This week Allergan unveiled a $639 million (€573m) agreement to buy Vitae Pharmaceuticals, a biopharmaceutical company working on a number of products aimed at treating skin problems such as psoriasis and atopic dermatitis. It marks its third small – relatively speaking, of course – acquisition since the start of August.

It comes a week after Allergan, led by chief executive Brent Saunders, spent an upfront $60 million buying a company focused on gene therapy for restoring vision in patients. And it has also stumped up $95 million for a glaucoma treatment company.

Shareholders in the company which, while incorporated in Dublin, continues to have its executive offices in New Jersey, seem to like the deal – part of Allergan chief executive’s Brent Saunders “stepping stone” strategy – with its stock rising 2 per cent on Wednesday when the transaction was unveiled.

Following the recent evolution of Allergan would give you whiplash. Founded in 1948, the company spent the early part of its life as a maker of eye drops. Having fought off a takeover approach from rival drugmaker Valeant in 2014, the company fell into the arms of Activis, which changed its name to Allergan after completing a $66 billion takeover. Still with us?

But the prize transaction would have been Viagra-maker Pfizer’s plan, unveiled late last year, to take over Allergan in a $150 billion deal to create the world’s largest pharma group. The merger, which would have resulted in Pfizer assuming Allergan’s tax base in Ireland, collapsed in April after Obama’s administration moved to clamp down on such tax-based deals, known as “inversions”.

While analysts at brokerage Evercore ISI said this week that the Vitae deal has the potential to be “a home run”, we’re not so sure. But at least it gets Allergan to the next base.