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US: Allergan to pay 19 times company’s worth

By  |  September 21, 2016

On Tuesday, pharma giant Allergan announced that it struck a deal to buy the California biotech for an upfront payment of $28.35 per share in cash. Furthermore, Allergan said it would pay as much as $49.84 per share in contingent value rights if Tobira, which doesn’t have any approved treatments on the market, meets certain developmental milestones, totaling $1.7 billion.

The price doesn’t seem too high until it is noted that Tobira’s closing price on Monday was merely $4.74.

This massive difference is due to Tobira testing a new drug designed to combat a condition known as fatty liver disease. With the rising rate of obesity in the US, Allergan estimates that as many as 5% of all Americans have the disease and this condition may very well “become one of the next epidemic-level chronic diseases we face as a society,” said Allergan CEO Brent Saunders.

Full Content: Fortune

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