) has entered into a licensing agreement with research-based
biopharma company, Medytox, Inc.
Under the terms of the agreement, Allergan will make an
upfront payment of $65 million to Medytox. In return, Allergan
will gain exclusive global rights (excluding Korea) to develop
and commercialize certain neurotoxin candidates currently in
development. The candidates include a liquid injectable.
Apart from the upfront payment, Allergan may end up paying up
to an additional $297 million (up to $116.5 million on the
achievement of development milestones and up to $180.5 million on
the achievement of commercialization milestones) and royalties on
Medytox mainly focuses on the development of botulinum toxin
products. The company currently has a marketed botulinum
toxin product (Neuronox) in its portfolio and is also working on
a next generation botulinum toxin product.
This deal, which will close once government approval is
received, is in line with Allergan's efforts to expand its
pipeline. Allergan already has a strong presence in the
neuromodulator market thanks to its key drug, Botox
(onabotulinumtoxin A). Botox is a major contributor to Allergan's
top line. First half 2013 sales came in at $970.9 million, up
12.9% from the year-ago period. Allergan expects Botox sales of
$1.94 billion - $2.00 billion in 2013. Allergan is working on
expanding Botox' label and recently received approval for crow's
Allergan currently carries a Zacks Rank #3 (Hold). Although we
believe Allergan's presence across different segments will help
maintain growth, we remain concerned about the generic and
competitive challenges being faced by the company.
Currently, companies that look well-positioned include
). While Roche is a Zacks Rank #1 (Strong Buy) stock, Bayer and
Novo Nordisk are Zacks Rank #2 (Buy) stocks.
ALLERGAN INC (AGN): Free Stock Analysis
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