Dermatology Drug Portfolios Trade Hands

Dermatology physician practics are all the rage among private equity groups these days. Thirty deals targeting this specialty have been announced in the first seven months of 2018. All have been acquired by a private equity firm or one of their platform companies.

But in the first week of August, two international pharmaceutical companies acquired portfolios of dermatology brands from the likes of Allergan plc (NYSE: AGN) and Bayer AG (BAYGn.DE).

Barcelona-based Almirall, S.A. (MCE: ALM) was the only company to disclose a price in its announcement. It agreed to pay $550 million upfront for Allergan’s U.S. dermatology portfolio,  and a possible earn-out of up to $100 million based on the brands’ business performance.

The brands acquired include four already marketed acne products and a new brand, Seysara, which is pending FDA approval, anticipated in the fourth quarter of 2018.

This acquisition reinforces Almirall’s dermatology franchise and positions it as a key growth driver, representing approximately 45% of net sales (proforma). The portfolio had net sales of $70 million in the first half of 2018. Almirall expects sales of Seysara to generate up to $200 million at its peak. This deal is expected to close in the fourth quarter.

The second deal announced came from LEO Pharma, based in Ballerup, Denmark. The company is acquiring Bayer’s global prescription dermatology brands,  including topical prescription treatments for acne, fungal skin infections and rosacea, and a range of topical steroids. Financial terms were not disclosed.

Bayer has been shopping this portfolio since 2016, and now wants to focus on integrating agricultural giant Monsanto and on bolstering its drug development pipeline. The transaction does not incude its over-the-counter dermatology brands.

 

 

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