Max Nisen, Columnist

Allergan's Vitae Buyout Makes a Statement

Moving closer to traditional pharma's R&D model and rejecting Valeant's.

September 14, 2016 at 4:06 PM UTC

Max Nisen is a healthcare analyst at Bloomberg Intelligence. He previously wrote for Bloomberg Opinion, Quartz and Business Insider.

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Allergan's transformation this year was supposed to be into a tax-advantaged subsidiary of Pfizer. After that deal blew up, Allergan has pursued a different metamorphosis, from a specialty pharma company lumped (unfairly or not) with controversial firms like Valeant to a more conventional, research-focused pharma firm.

Evidence of this long-heralded shift came Wednesday morning with the company's $639 million purchase of Vitae Pharmaceuticals, which has a pipeline of dermatology drug candidates. This is not a mega-deal, nor is it a purchase of already marketed drugs that are ripe for price hikes. It's a risky, research-focused deal for drugs that are still in development and face heavy competition. And Allergan is paying dearly for the pleasure -- a 159 percent premium to Vitae's share price on Tuesday.