Acquisition strengthens firm’s position in cosmetic treatments with only drug approved for a ‘double chin’
Pharma firm Allergan has agreed to buy Kythera Biopharmaceuticals in a $2.1 billion (£1.3 billion) deal. The acquisition follows the recent announcement that Kythera is to sell the only treatment for a ‘double chin’ that has been approved by the US Food and Drug Administration.
Kythera was founded in 2005 and is mainly involved in the growing market of facial aesthetics. Since the development of its cosmetic product Kybella, a deoxycholic acid injection which helps to reduce submental fullness below the chin, the company has yet to generate any revenue from product sales, reporting a net loss of $135.6 million in 2014.
The acquisition of Kythera will help to bolster Allergan’s foothold in the cosmetic treatment sector and will be completed under a cash and equity transaction. Allergan, which was bought earlier this year by Actavis in a $70 billion deal, will pay $75 per share, 80% of which will go to Kythera’s stakeholders in cash. The remaining amount will be paid in shares.