Allergan plc Ordinary Shares (AGN) Up on $639M Buyout of Vitae Pharmaceuticals Inc (VTAE)

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Biotech stocks are looking to erase their losses over the past month today, strongly driven by the buyout of Vitae Pharmaceuticals Inc (NASDAQ:VTAE) by Allergan plc Ordinary Shares (NYSE:AGN).

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Allergan and Vitae Pharmaceuticals have agreed to a buyout at $21 per share, upside of 159% from Tuesday’s closing price of $8.10.

The all-cash deal comes to a total of $639 million, and was unanimously approved by both companies’ boards, and AGN stock is currently up nearly 3% on the news.

What Allergan Wants With Vitae Stock

Vitae Pharma develops treatments for autoimmune disorders such as psoriasis, atopic dermatitis, Alzheimer’s disease and acute coronary syndrome. Its proprietary Contour system targets diseases with underwhelming treatments utilizing a structure-based design enabling it to discover product candidates where other biotechs struggle.

The buyout fits right into Allergan’s mantra of “growth pharma.” The biotech firm currently offers products that address issues ranging from the central nervous system and gastroenterology to eye care and dermatology. Allergan’s chief research and development officer, David Nicholson, believes Contour will help Allergan speed up its R&D in “key therapeutic areas.”

Vitae is currently experimenting with a treatment for psoriasis, which affects 7.5 million in America. It is also working on a treatment for atopic dermatitis, a market of some 18 million Americans.

Allergan’s President and CEO, Brent Saunders, had this to say about the buyout:

“The acquisition of Vitae is a strategic investment for Allergan that adds strength and depth to our innovative medical dermatology franchise. Vitae has pioneered the discovery and development of highly differentiated first-in-class compounds in atopic dermatitis, psoriasis and autoimmune diseases, areas of medicine where innovation is needed for patients.”

As for Vitae, CEO Jeff Hatfield responded:

“Allergan has a long track record in developing and commercializing innovative dermatologic treatments. I believe our programs will be poised for successful development as part of Allergan’s portfolio.”

The deal, however, still needs U.S. antitrust clearance. If approved, Allergan hopes to close the deal by the end of the year.

As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/09/allergan-plc-ordinary-shares-agn-up-on-639m-buyout-of-vitae-pharmaceuticals-inc-vtae/.

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