Allergan Buys Medical Aesthetics Firm Bonti for $195mln

Allergan Buys Medical Aesthetics Firm Bonti for $195mln
September 17, 2018


Dublin-based Allergan Plc (NYSE:AGN) is acquiring Newport Beach, California-based Bonti with an upfront payment of $195 million. In other related news, the company announced that revenue from its medical aesthetics business could double by 2025, even as it faces increasing competition for its blockbuster wrinkle treatment, Botox. The stock of Allergan closed at $188.22 on Friday.


Bonti acquisition to strengthen medical aesthetics business

Bonti is a privately-run, clinical-phase firm focused on highly potent neurotoxin chemicals for aesthetic and therapeutic usages. As part of the agreement, Allergan gets worldwide rights to two of Bonti’s prescription candidates. In the aesthetic program, Eb-001a is a new botulinum neurotoxin serotype e, which was recognized by the excessive dominance of action within 24 hours and term of action from 2 to 4 weeks. It is presently in phase 2 clinical trials. Bonti has recently published topline information from Eb-001 in glabellar frown lines.

Eb-001T uses the similar effective constituent in the therapeutic program. Eb-001 T is presently in phase 2 trials for focal muscle ache resulting from surgery or non-surgical muscle injury. Eb-001A is also inspected for use after Mohs surgery for scar minimization. Mohs surgery is performed to take care of skin cancer. On August 23, the company published positive Phase IIa data, showing a favorable safety synopsis and implying potential clinical efficacy.

Commenting on the acquisition, Brent Saunders, chairman, and CEO of Allergan said: “The acquisition of Bonti is a strategic investment for the future of our Medical Aesthetics business and has the potential to enhance our best-in-class Medical Aesthetics pipeline. With the Medical Aesthetics market vastly expanding, a fast-acting neurotoxin with a 2- to 4-week duration will be an attractive option for consumers, particularly those who are considering a Medical Aesthetics treatment for the first time.”

Regarding the acquisition, Fauad Hasan, CEO, and co-founder of Bonti stated: “We’re excited about the development and commercial prospects for our novel programs within Allergan’s leading Medical Aesthetics portfolio. The promise of benefiting more consumers worldwide with our novel neurotoxin programs plus Allergan’s stature and resources in this market will help realize our team’s and investors’ aims. We could not envision a more compelling acquirer or better strategic fit.”

The information comes just two days after the launch of Spotlyte, a digital center for a curated matter where Allergan clients can gain knowledge about medical aesthetic treatment. Apart from the news bulletin, it will also facilitate real-time support and chat exclusively with trained professionals, which is the first endeavor from the new-found Allergan-owned digital ventures unit, Project Moonwalker.

Alexandra Wilkis Wilson, co-founder of Gilt Groupe and Glamsquad, and senior vice president of Consumer Strategy and Innovation at Allergan stated as follows: “We have a unique position as industry leaders to identify emerging trends in real time and change the way that consumers engage with medical aesthetics. I have spent most of my career focused on the consumer while creating powerful brands at the intersection of technology and lifestyle. The core goal of Project Moonwalker is to enable information flow and access. Spotlyte is the first step in changing how consumers can become better educated on medical aesthetics.”

In addition to that clinical push, an expanded investment in direct-to-consumer marketing will take place. Between 2015 and 2017, Allergan spent an average of $55 million a year on DTC. From the current date up until 2020, the pharmaceutical company forecasts expenses to the tune of 150 million dollars per year. This fall, for example, Allergan will introduce a new campaign called “bo curious” for people contemplating Botox (onabotulinumtoxina) treatment. The medical aesthetics market already represents approximately 30% of Allergan’s total sales, totaling $1.15 billion in the quarter ended June. Slightly over $400 million of that definitively came from sales of Botox. Developing its Kybella and Juvederm brands, along with the fat-destroying “CoolScultping” business it acquired in its $ 2.5 billion purchase of Zeltiq in 2017, is a principal part of those expansion strategies. Allergan stated that revenues from the medical aesthetics business could double by 2025, although competition for its blockbuster wrinkle treatment Botox is intensifying.

Allergan is also doubling-up its capital investment in direct-to-consumer advertising spending and shoring up its sales team as businesses like Revance Therapeutics Inc (rvnc.o) and Evolus inc (eols.o) fight to extract market shares with competing solutions to Botox.

The company announced the plans at its Medical Aesthetics day in New York. The Chief Commercial officer, Bill Meury, said Allergan anticipates sales of its medical aesthetics unit to rise to $7 – $8 billion. That contrasts with revenue of $3.8 billion from the business in fiscal 2017.

Other than Botox, the division encompasses the CoolSculpting fat-freezing systems and dermal filler Juvederm, among others. Meury said the prediction implies an annual growth rate of 8% to 10%. He also said the Bonti takeover would help the company to market a new “starter toxin.” Patients could test the treatment, which typically lasts for two to four weeks, to determine whether they want to use Botox for the long-term. Therefore, fundamentally, the acquisition will aid the company’s expansion plans.

Technically, the stock has crossed above its 50-day moving average, and the stochastic indicator is in the bullish zone. Therefore, we can expect the stock to rise further in the days ahead.

AGN - technical analysis - 17th September 2018

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Andrew Wright

Prior to founding in 2014, Andrew worked as a proprietary trader, then as a market maker. As a market maker, he traded options in over 100 stocks, he then began trading currency pairs in 2013. Andrew still actively trades both, and prides himself on educating and informing traders on the benefits of both Binary Options and Forex.

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