Drug specialist Allergan Inc. will purchase all remaining shares and assets of Vicept Therapeutics, a privately-held dermatology company. The strategic acquisition will include an upfront cash payment of $75 million by Allergan, plus up to $200 million in aggregate payments.
Allergan's stock (AGN) steadily increased shortly after the announcement, closing at $84.02 on July 19. The aim of the agreement is for Allergan to expand its skin therapy treatment segment. Vicept's main research product is V-101, a topical cream that will be used to treat the erythema, or redness, that is associated with treatment of rosacea.
Although topical treatments such as metronidazole, benzoyl peroxide and azelaic acid are used to treat erythema and inflamation, there are currently no approved topical treatments for Rosacea. Vicept's V-101 has undergone two placebo-controlled Phase II studies with positive results, and the company hopes the deal will give it a greater chance to launch its treatment to the 45 million people around the world with rosacea.
According to President and CEO Dr. Neal Walker, the Phase II studies demonstrate the clinical potential of V-101. Dr. Walker believes that Allergan is the most capable company to complete the product and make it readily available to patients. He hopes that the acquisition will enhance Vicept's dermatology research and development.
Pennsylvania-based Vicept Therapeutics was founded in 2009 and backed by Fidelity Biosciences, Vivo Ventures, and Sofinnova Ventures. While their main mission is to develop the first-approved topical treatment for erythema of rosacea, the company is also developing topical agents for treating and preventing a number of medical and cosmetic issues, including skin bruising.
Vicept already received $16 million in capital funding last summer to support the V-101 project.
Allergan's Cell-based Assay Approved for Botox
Currently, Allergan's most successful product in skin therapy segment is onabotulinumtoxin A, also known as Botox.
The FDA has approved Allergan's cell-based assay, which will be used for testing Botox. While Botox is one of the few compounds that requires animal testing prior to being released, Allergan's new assay is expected to reduce animal use in testing by up to 95% over the next three years.
The use of mouse LD50 assay is a safety requirement by the FDA in the US and the MHRA in Europe. The active ingredient in Botox, botulinum neurotoxin, is naturally occurring and very potent.
Prior to the acceptance of the new assay, Allergan had made many attempts to replace LD50 with little success. The FDA-approved assay needed to be highly sensitive in order to succeed as a replacement. Executive Vice President Scott Whitcup has stated that his company will work hard to secure the approval of the assay in the remaining countries that use Botox and Botox Cosmetic.
Key Statistics – World Dermatology Device Market (source: Markets and Markets)
- The global market for dermatology diagnostic equipment reached roughly $175 million last year. Forecasts show the market growing at a CAGR of 7.3% within a five year span.
- LED light therapy devices make up the majority share due to increasing skin diseases, including skin cancer, vascular lesions and pigment lesions.
- The global market for dermatology treatment devices was estimated to be $3.6 billion last year.
- Rosacea occurs more frequently in women than men and is more easily diagnosed in those with a fair-skin complexion.
- Over 14 million Americans have rosacea, or about 1 in 20.