Allergan (AGN) - Get Report CEO Brent Saunders is proving to be a savvy dealmaker yet again as the Botox-maker acquires an innovative biotech to further build its dermatology franchise. 

Dublin-based Allergan said Wednesday it's buying clinical stage biotech Vitae Pharmaceuticals Inc. (VTAE)  for $21 a share in cash, or about $639 million, a roughly 159% premium.

In what marks the company's third acquisition since early August, the Vitae deal aligns with what Saunders has deemed its "stepping stone" strategy, which involves smaller- to mid-sized transactions as opposed to transformational M&A. 

Vitae's Nasdaq-listed shares soared about 158% to $20.90 a piece during Wednesday morning's trading session. Allergan shares climbed about 2.7% to $246.67 a share. 

"We believe Allergan is doing all of the right things, and it is only a matter of when, not if, the market recognizes and appreciates the potential," said Jim Cramer and Jack Mohr, portfolio manager and director of research, respectively, of TheStreet's Action Alerts Portfolio. "You can be confident the company is putting its moneywhere its mouth is."

Headquartered in Fort Washington, Pa., Vitae's lead drug candidates are VTP-43742 and an oral RORyt inhibitor to treat patients with moderate-to-severe psoriasis. The company is also developing VTP-38543, a potential treatment for mild-to-moderate atopic dermatitis that is currently in a Phase 2a proof-of-concept clinical trial. 

Vitae also encompasses Coutour, a platform that it uses to discover product candidates for therapeutic targets which the industry has traditionally struggled to develop. 

"It's such a premium to [yesterday's] close, but atopic dermatitis seems so popular I wouldn't rule out a competing bid," Liana Moussatos of Wedbush PacGrow Life Sciences said by phone Wednesday morning. 

Thomas Shrader of Stifel Inc. wrote in a Wednesday report that despite the seemingly attractive premium for the target, the price is a relatively low multiple on its $1.5 billion worldwide peak sales estimate for Vitae's psoriasis assets alone. 

"We think Allergan, in one deal, acquired three important molecules and also strapped on a world class structure-based medicinal chemistry effort ... It looks like a very smart move to us and we expect more of the same in the sector," Shrader wrote.

Moussatos suggested that a recent play by Pfizer Inc. (PFE) - Get Report —the company that Allergan called of its $150 billion fusion with in April—as potentially fueling interest in Vitae.

Pfizer in May agreed to fork out $5.2 billion for Anacor Pharmaceuticals Inc. (ANAC) . The target company's Crisaborole, similar to one of Vitae's in-development products, is an anti-inflammatory drug currently under U.S. Food and Drug Administration review for the treatment of mild-to-moderate atopic dermatitis. 

Moussatos added that the investment community had been awaiting stage 2 data for Vitae's atomic dermatitis product currently under development, VTP-38543, anticipated to be released in the fourth quarter of the year: "It must have worked ... I presume that was the trigger for Allergan." 

While atomic dermatitis continues to prove a hot space for Big Pharma, TheStreet's Cramer and Mohr noted that importantly, Vitae's target market for AD is differentiated from Regeneron's (REGN) - Get Report  dupilumab product, which is for the severe form of AD.

"Vitae's therapy has the potential to disrupt and ultimately pioneer what is a true unmet need in the marketplace," they wrote. 

For Allergan, the acquisition comes only about a week after it disclosed the acquisition of substantially all of the assets of RetroSense Therapeutics LLC, a biotechnology company concentrated on gene therapy approaches to restoring vision in patients. The agreement encompassed an upfront payment of $60 million, plus potential regulatory and commercialization milestone payments tied to RetroSense's lead development program, RST-001. 

In early August, Allergan announced the acquisition of glaucoma treatment company ForSight VISION5 Inc. for an upfront consideration of $95 million. 

The boards of each party have approved the Vitae transaction and anticipate it to close in by the end of the year. 

Allergan's cash tender offer for the target remains subject to customary closing conditions, including U.S. antitrust clearance as well as the tender of a majority of the outstanding shares. The agreement calls for Allergan to acquire and shares of Vitae that are not tendered via a second-stop merger. 

Debevoise & Plimpton LLP is serving as legal counsel to Allergan's legal counsel, led by  Andrew L. Bab and including Jeffrey P. Cunard, Gary M. Friedman and Jonathan F. Lewis.

J.P. Morgan is providing as financial advice to Vitae on the transaction. 

Jay Hachigian, Andrew Luh, Gregg Griner, Keith Scherer, Albert Vanderlaan, James Hauser, Timothy Ehrlich and Mark Foster of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP is serving as Vitae's legal counsel.

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