Biotech Values

[DewDiligence]

AGN acquires KYTH for $75/sh in cash+stock:

http://finance.yahoo.com/news/allergan-acquire-kythera-biopharmaceuticals-110000728.html

The [$75] fixed-value transaction consideration will be payable 80 percent in cash and 20 percent in new AGN shares issued to KYTHERA shareholders. Allergan's 2015 earnings-per-share forecast provided on May 11, 2015 is unchanged as a result of the acquisition. The acquisition is expected to be breakeven in 2016 and accretive thereafter.

What’s notable about the deal terms is that the new AGN (called Actavis until yesterday) is so levered it had to use stock for 20% of the consideration.

The nominal premium to KYTH’s closing price yesterday is 24%, and the nominal deal value is $2.1B. There was a CC at 8:30am ET.

As an AGN shareholder, I'm lukewarm on this deal. I don't think Kybella will become a big-selling product even with heavy detailing by AGN.