Valeant Pharmaceuticals International, a Canada-based specialty drug maker with Orange County roots and operations in Aliso Viejo, is looking to grow its skincare business alongside its mainstay neurology drugs.
Valeant is planning to pay $770 million to add two mid-size companies. On July 15, Valeant said it was going to pay $345 million for the skincare unit of Titusville, N.J.-based Janssen Pharmaceuticals, a Johnson & Johnson company.
Earlier, Valeant announced it was paying $425 million for Dermik Laboratories, a skincare business of Paris-based Sanofi-Aventis SA with a plant in Canada.
The deal will bring about $1 billion in annual revenue from dermatology, Valeant Chief Executive J. Michael Pearson said in published reports. That’s about 5% of the $20 billion dermatology market worldwide and would amount to a gain of about 65% on the company’s annual revenue of about $1.5 billion.
Pearson said Valeant wants to become the world’s biggest player in skincare in about five years.
“We’re ambitious in many ways. We just want to be a lot bigger than anyone else,” he said.
Valeant mainly competes in skincare with Irvine-based Allergan Inc.; Scottsdale, Ariz.-based Medicis Pharmaceutical Corp.; and Stiefel Laboratories Inc., a unit of Britain’s GlaxoSmithKline PLC, in the dermatology market.
“They’re out there buying assets for cash flow and building a broad dermatology presence,” Annabel Samimy, a drug analyst with St. Louis-based Stifel, Nicolaus & Co., told Reuters. “It seems like a pretty sound strategy to me,” in part because Valeant is buying assets that “are not necessarily the ones that require a significant amount of promotion or expense behind them.”
The company moved its headquarters from Aliso Viejo to Canada in late 2010 after Biovail Laboratories bought it last year for $3.2 billion. Biovail then took the Valeant name. Pearson, who ran Valeant before the deal, now runs the combined company.
Valeant has its roots in ICN Pharmaceuti-cals Inc., an Aliso Viejo-based drug maker that was formerly in Costa Mesa and established by former Serbian prime minister Milan Panic. The company moved to Aliso Viejo in 2006.
Allergan Buy Praised
Allergan’s recent buy of startup skin drug maker Vicept Therapeutics got a thumbs-up from Boston investment bank Leerink Swann LLC. Allergan said earlier this month that it would pay $75 million up front and up to $200 million in incentives for Malvern, Pa.-based Vicept.
“We like this acquisition … and think the company is in a good position to increase capital development/M&A activity,” said Seamus Fernandez and Kathryn Alexander, Leerink analysts, in a flash note.
The analysts said Vicept’s V-101 and other topical creams targeting redness associated with the skin disease rosacea “could bridge the gap from the aesthetic self-pay products to reimbursed medical products.”
Separately, Allergan said the Food and Drug Administration recently approved a fully in-vitro, cell-based test to be used in stability and potency testing of Botox and Botox Cosmetic.
Allergan said it estimated the use of the new test will reduce the use of animal-based regimens for Botox and Botox Cosmetic by 95% or more over the next three years, as other regulatory agencies around the world approve the test.
The company said that it spent $65 million and more than a decade to look for ways to minimize “to the greatest degree possible” the need to use animal testing in the manufacturing of Botox and Botox Cosmetic.
Allergan said its new test is specific to its formulation of botulinum neurotoxin type A, but that it’s discussing how to license it to “other parties that share its commitment to implementing non-animal alternatives to animal-based assays” in making medical products.
Humana Taps Apria
Apria Healthcare Group Inc. of Lake Forest has won a big contract to be the home healthcare provider for Louisville, Ky.-based Humana Inc., according to a report in HomeCare Magazine, a trade publication.
Apria will provide “home oxygen services, breathing equipment, home tube feeding and other medical equipment services provided in the home,” Humana said on its website.
Humana also said that Apria would be an in-network provider for outpatient negative pressure wound therapy.
The company said its relationship “with several home medical equipment providers is being terminated.”
Some of those providers—particularly small, independent ones—didn’t take Humana’s decision too well, according to the article.
“I view this as being almost as threatening as competitive bidding to the independent providers in America,” Jason Rogers, president of Athens, Ga.-based Care Medical, told HomeCare.
“If this goes well, who is to say this won’t be Blue Cross, Medicaid and who knows who else?” Rogers said. “It won’t matter how good we are.”
Grubb & Ellis in Florida
A unit of Santa Ana-based Grubb & Ellis Co. has spent $7.2 million to buy the Maxfield medical office building in Sarasota, Fla.
Maxfield has 41,000 square feet of space and three stories. It’s located adjacent to Doctors Hospital, a 168-bed facility, and is close to Sarasota Memorial Hospital, an 805-bed community hospital.
The building was constructed in 2001, and is 91% leased to six providers, including practices in orthopedic surgery, neurosurgery and spine services, internal medicine and primary care, along with a rehabilitation provider and a home health services agency.
Grubb bought the building from Maxfield Medical Building LLC, an unaffiliated third party represented by Duane Henderson, a broker with Wagner Realty in Sarasota. Manfred Welfonder, owner of MW Develop-ment & Investment in Sarasota, represented Grubb.
