Allergan Acquires Esprit Pharma

Allergan (AGN) said Wednesday it will acquire Esprit Pharma in a $370 million deal that expands its stance in the genitourinary market.

Allergan expects the all-cash transaction, in which it will pay $370 million for all outstanding securities of privately held Esprit, to close in the fourth quarter. The deal sparks a new licensing agreement with Indevus Pharmaceuticals (IDEV).

Esprit licenses from Indevus and currently markets twice-daily Sanctura, a treatment for overactive bladder -- OAB. The U.S. Food and Drug Administration recently approved an extended-release once-daily formulation, Sanctura XR. Allergan anticipates launching Sanctura XR in the first quarter and said it will increase Esprit's sales force.

Pending the close of the acquisition, Allergan said it expects Esprit will contribute revenue of $6 million to $12 million in the fourth quarter of 2007. With the launch of Sanctura XR and the increase in Esprit's sales force taken into consideration, Allergan believes the transaction will be dilutive by 4 cents to 6 cents a share, excluding items.

Allergan said it still anticipates upper-teens earnings growth in 2008, based on the pretransaction 2007 guidance of $2.16 to $2.18 a share it provided with second-quarter results. The company said the transaction should be significantly accretive to earnings and revenue after 2008.

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