Allergan, the pharmaceutical giant that has announced a $200 million expansion of its Waco plant, will buy three companies in deals valued at almost $2.4 billion as it acquires assets to complement its operations in the United States and abroad and invests more in research and development.
The company, based in Dublin, Ireland, but with a U.S. headquarters in New Jersey, has announced it will spend an estimated $1.7 billion to land Tobira Therapeutics Inc., which develops therapies for liver disease; $639 million for Vitae Pharmaceuticals, which researches skin-care products; and $50 million for Akarna Therapeutics, which also is involved in liver treatments.
Allergan’s Waco plant primarily manufactures eye-care products, including Restasis, Lumigan, Refresh Plus, Refresh Tears and Latisse.
But it also contributes to Allergan’s dermatological product line, and company officials said the 322,000-square-foot, $200 million expansion over four years could mean it gets involved in other drugs making their way through the research-and-development pipeline. Allergan has said it will hire 75 to 100 additional employees in the near future and a total of 250 by the time production peaks. More than 700 people already work at the Allergan complex on Mars Drive that opened 27 years ago.
The deal with Vitae Pharmaceuticals gives Allergan access to two products in development for treating eczema, a skin disease that causes itchy patches.
“The acquisition of Vitae is a strategic investment for Allergan that adds strength and depth to our innovative medical dermatology franchise,” Allergan CEO Brent Saunders said in a statement.
Allergan was interested in buying Anacor Pharmaceuticals because of an eczema drug the company was developing, but rival Pfizer beat Allergan to the punch, agreeing in May to buy Anacor for $4.5 billion, according to a story published by The Wall Street Journal.
Meanwhile, Tobira devises treatments for steatohepatitis, also known as fatty liver, which can be caused by alcohol abuse, obesity or type 2 diabetes and can lead to cirrhosis or liver failure.
Allergan reportedly bought Akarna Therapeutics because it continues to perform research related to fatty liver not caused by overuse of alcohol.
“These are research-and-development acquisitions,” Allergan spokesman Mike Marmur said. “It is very early to comment on where these products will be manufactured, but I guess there is always the possibility Waco would get involved because of the dermatological factor.”
Allergan has hired California-based Jacobs Engineering Group to design the Waco plant’s expansion, and the company should complete a detailed work-up in seven to nine months, Marmur said.
“Allergan plans to begin initial ground work before the end of 2016, and hiring will not begin until later in the construction phase,” Marmur said.
An Allergan press release suggests the company’s acquisition of Tobira and Akarna could contribute to the development of a treatment for nonalcoholic steatohepatitis, or NASH, which there is no remedy for, Allergan chief research and development officer David Nicholson said in the release.
“I am extremely excited to see Tobira and Allergan come together,” Tobira CEO Laurent Fischer said in prepared remarks on the Allergan website.
The combination of his team’s innovation and Allergan’s infrastructure and ability to market medications will put products in the hands of NASH sufferers, Fisher said in the statement.
After announcing plans to expand its Waco plant, Allergan received a promise of $21 million in economic development incentives from Waco and McLennan County. The city’s tax deal reportedly would be worth $13 million over 20 years, and county commissioners may approve a similar deal worth $8.1 million.
Contracts are being prepared to present to the council and commissioners that would formally approve the tax deals, said Kris Collins, senior vice president for economic development at the Greater Waco Chamber of Commerce. Meanwhile, the Waco-McLennan County Economic Development Corp. recommended a $4 million cash contribution toward the project from the city-county incentive fund, which is a matter the city and county governing bodies also must approve before it goes into effect.
Only one project has received a larger cash incentive: The Baylor Research and Innovation Collaborative got $5 million in 2009.
Allergan officials said besides the cost of construction, which will run $177.6 million, they will spend $22.5 million on testing, verification and equipment calibration before they open the expanded area, probably in 2020. Allergan leaders have said Waco’s incentive package was a factor in choosing the city over other communities.
The company has 12 manufacturing facilities and enjoyed $3.7 billion in net revenues during the second quarter of 2016.