Allergan PLC finalized a multi-million licensing deal with Heptares Therapeutics of U.K. after its $150 billion merger plans with Pfizer was scuttled by the new inversion laws of the United States.
The new deal involves the development of drugs for Alzheimer's and other neurological conditions. This move shows the determination of the U.K.-based company to move on and stay as a stand-alone drug firm.
The contract with Heptares requires Allergan to pay up front $125 million to the Japanese-owned company, and another $665 million in milestone payments if they successfully complete clinical trials of the drugs they manufacture.
Heptares Therapeutics is wholly owned by Sosei Group Corp., the parent company based in Japan.
Another $2.5 billion in milestone payments apart from royalties will be due, depending on the potential success of the drugs. Allergan also committed to invest $50 million for a joint research and development program to promote a number of drugs to mid-stage human trials.
Brent Saunders, Allergan CEO, stated that his company is capable of delivering "sustainable growth" on its own. He added that it has strong brands and a drug pipeline with much potential. The company is also expecting to close the sale of the Actavis generics business to Teva Pharmaceutical Industries for $40.5 billion in June.
Teva Pharmaceuticals has offices in North Wales, and employs over 2,000 workers in the Philadelphia region.
Allergan's initiatives will allay the fears of investors that the sudden collapse of its merger with Pfizer will disrupt its conduct of business at Dublin, Ireland.
On the other side of the Atlantic, the United States Treasury Department rallied against criticisms pointed against its new tax inversion rules.
It stated that these new regulations are shutting down loopholes or unfair provisions that enable large corporations transfer their tax affairs to countries with lesser levies by combining with smaller companies.
Sources:
https://www.wsj.com/articles/allergan-completes-licensing-deal-after-pfizer-bid-collapses-1460031574
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