Allergan, Inc. announced the completion of its acquisition of Swiss medical technology developer EndoArt SA, a leader in the field of telemetrically-controlled (or remote-controlled) implants used in the treatment of morbid obesity and other conditions.
The acquisition builds upon the strength of Allergan's existing obesity intervention product portfolio, which includes the LAP-BAND Adjustable Gastric Banding System, currently the only adjustable implant device for individualized weight loss approved in the United States and a leading bariatric procedure worldwide; and the BIB BioEnterics Intragastric Balloon, a non-surgical alternative for the treatment of obesity approved in many countries although not currently available in the United States.
Allergan paid $97 million, net of excess cash, for the EndoArt shares in an all cash transaction. Allergan will not alter financial guidance for 2007 as a result of the transaction. Estimates of any costs that will be excluded from Allergan's adjusted earnings per share will be provided at the time of Allergan's first quarter 2007 Earnings Release. It is anticipated that a substantial portion of the acquisition purchase price will be expensed by Allergan as in-process research and development, with the balance of the purchase price being allocated to other identifiable tangible and intangible assets acquired, including developed and core technologies, liabilities assumed and goodwill. An independent third-party valuation firm has been engaged to assist Allergan in determining the estimated fair values of the acquired intangible assets, including in-process research and development.
The acquisition gives Allergan ownership of EndoArt's proprietary technology platform, including FloWatch(R) technology, which powers the Easyband Remote Adjustable Gastric Band System, a next-generation, telemetrically-adjustable gastric banding device for the treatment of morbid obesity. The Easyband device is surgically implanted around the upper stomach and can be adjusted when necessary according to each patient's individual weight loss needs and results using a simple external control unit placed over the device. The control unit transmits power and commands to, and receives information from, an implanted antenna connected to the Easyband, which can then be adjusted precisely and in just minutes.
"This acquisition is representative of our commitment to actively pursue the development and commercialization of next-generation products and technologies capable of providing high-quality, healthier and less traumatic weight-loss treatment solutions to patients, physicians, governments, employers and health care payers," said David E.I. Pyott, Allergan's chairman of the board and chief executive officer. "We also believe that this proprietary technology has exciting potential across a broad range of other medical device applications and disease categories, such as urology and gastroenterology."
"We are very pleased to be joining Allergan in its effort to address the serious immediate and long-term consequences of the worldwide obesity epidemic - an effort that will benefit from the depth and breadth of Allergan's investment in the research, development and commercialization of next-generation products and technologies," said Philippe Dro, chief executive officer and chairman of EndoArt.
Easyband Gastric Banding System was approved by the European Commission for use in Europe in mid-2006. Allergan anticipates seeking U.S. Food and Drug Administration (FDA) approval of the device following completion of clinical studies that will be conducted in the United States. Allergan also is establishing EndoArt's facility in Lausanne, Switzerland as an international centre of excellence for research and development in obesity-related disorders.