Allergan has entered into a definitive agreement to acquire Vitae Pharmaceuticals, a clinical-stage biotechnology company, for approximately $639m.
The boards of directors of both companies have unanimously approved the transaction.
This purchase will boost Allergan's dermatology product pipeline, with the addition of VTP-43742, a Phase 2 first-in-class, orally active retinoic acid receptor-related orphan receptor gamma (RORγt) inhibitor for the potential treatment of psoriasis and other autoimmune disorders.
VTP-43742 acts through the potent inhibition of IL-17 activity.
In preclinical studies, VTP-43742 has shown to inhibit RORγt activity, and is highly selective versus other ROR isotypes, and may provide a treatment that could be administered as a once-daily oral dose.
The compound recently completed a Phase 2 proof-of-concept multiple ascending dose trial in patients with moderate to severe psoriasis.
The acquisition also adds VTP-38543, a topical Liver X Receptor beta (LXRβ) selective agonist for the potential treatment of atopic dermatitis.
It is believed that VTP-38543 works by decreasing inflammation in damaged skin tissue and repairing the damaged outer layer of skin.
VTP-38543 is currently in a Phase 2a proof-of-concept clinical trial that assesses the safety, tolerability and efficacy in patients with mild to moderate atopic dermatitis.
Vitae has developed and makes use of its Contour structure-based drug design platform to discover product candidates for validated therapeutic targets where biopharmaceutical research and development has struggled to develop drugs due to challenges with regard to potency, selectivity and pharmacokinetics.
This has enabled Vitae's R&D team to create first-in-class product candidates for challenging therapeutic targets.
Allergan president and CEO Brent Saunders said: "The acquisition of Vitae is a strategic investment for Allergan that adds strength and depth to our innovative medical dermatology franchise.
"Vitae has pioneered the discovery and development of highly differentiated first-in-class compounds in atopic dermatitis, psoriasis and autoimmune diseases, areas of medicine where innovation is needed for patients."
Vitae CEO and president Jeff Hatfield said: "The Vitae team has been tremendously successful in discovering and conducting early development work in areas of medicine that can benefit from significant innovation.
"Allergan has a long track record in developing and commercialising innovative dermatologic treatments. I believe our programmes will be poised for successful development as part of Allergan's portfolio.
"I am very proud of the tremendous contributions of our research teams and the clinical community who have led the discovery and development of our pipeline programmes, and I thank them for their dedication to this science that may one day help many patients with dermatologic conditions, autoimmune disorders and potentially other conditions."
Allergan chief research and development officer David Nicholson said: "Both the VTP-43742 and VTP-38543 programmes offer the potential for highly differentiated mechanisms of action for the treatment of dermatologic conditions where patients are underserved by currently approved treatments.
"In addition, Vitae's novel Contour drug discovery platform and its team, which have been instrumental in the discovery of novel 'difficult to drug' compounds, will be highly complementary to Allergan's existing R&D discovery efforts in key therapeutic areas."
As per the terms of the merger agreement, a subsidiary of Allergan will start a cash tender offer to acquire all of the outstanding shares of Vitae common stock for $21.00 per share.
Closing of the tender offer is subject to customary closing conditions, including US antitrust clearance and the tender of a majority of the outstanding shares of Vitae common stock.