After three years of local job cuts and a shrinking corporate presence, Allergan PLC is investing again in Orange County.
Don’t expect the Irvine campus of Allergan—home to a good portion the New Jersey-based drugmaker’s medical aesthetics operation—to see a surge in new employees, though.
Bonti Inc., a startup clinical-stage biotechnology company that Allergan recently paid $195 million for, counted fewer than a dozen employees at its Newport Beach headquarters—less than a mile from Allergan’s local campus—as of earlier this year.
“We are a young company, three years [old],” said co-founder and Chief Executive Fauad Hasan, whose firm has raised about $36 million in venture capital since its inception, including a $15.5 million Series C round in January, led by City Hill Ventures LLC, a healthcare-focused investment firm based in San Diego.
In terms of this month’s deal with Allergan, announced on Sept. 14, “I think we showed success and maximized value for our investors,” said Hasan, who added that “we could not envision a more compelling acquirer or better strategic fit.”
Hasan would know; he previously served as a director of biologics manufacturing and development for Allergan, which long served as Orange County’s largest healthcare company, and OC’s largest public company.
He left Allergan in the wake of its $70.5 billion sale to Parsippany, N.J.-based Actavis PLC in 2015, a deal that’s resulted in sharp cuts to the company’s Irvine overall base of employees as well as its local executive ranks.
The recently-announced deal for Bonti—which includes an undisclosed amount of potential milestone payments—is the largest reported local investment for Allergan since that blockbuster 2015 deal.
Faster Hit
Bonti’s main product— a clinical-stage botulinum toxin called EB-001—is similar to Allergan’s best-known offering, Botox, but with some key differences; it’s characterized by a faster onset of effects than Botox, and has a shorter duration.
The neurotoxin has a two-to-four week duration of effect, and takes effect within 24 hours.
Botox, by comparison, can take three to seven days to take effect, but can last upwards of six months.
From the start Bonti separated its toxin into two products, EB-001A for aesthetics and EB-001T for therapeutics. “Allergan has one product, Botox, for aesthetic and therapeutic applications,” said Hasan.
Bonti’s aesthetic uses include treatment of frown line and scar reduction. It is also pursuing focal muscle pain for therapeutics.
Botox, similarly, is used or being studied for a variety of noncosmetic uses, such as treating overactive bladder symptoms.
New Wrinkle
The Bonti buy adds a new wrinkle, as it were, to Allergan’s line of medical aesthetics products and drugs.
The aesthetics market is booming in the U.S., thanks to the growing use and acceptance of Botox and other similar products by millennials, according to Allergan Chief Commercial Officer Bill Meury, speaking at the company’s Medical Aesthetics Day event this month, when the Bonti deal was first announced.
He attributed the growth to changed attitudes and perceptions, driving increased acceptability.
Allergan estimates that there are 65 million consumers who are considering facial injectable treatments.
Challenges still remain when it comes to adoption. Allergan said only about 6% of consumers in the U.S. have moved from considering facial injectables to having used them.
Bonti’s fast-acting neurotoxin could help bridge that gap.
Users on the fence about trying Botox “can test drive with Bonti and if they like [the effect] they can go and get Botox for [a] longer duration,” Hasan said.
Allergan Chief Executive Brent Saunders, speaking at his company’s Medical Aesthetics Day event, said that Bonti can also be used for consumers looking for a quick touch-up or needing a pre-event boost.
The addition of EB-001 will allow Allergan to “introduce new patients to the world of Botox,” Saunders said.
Allergan also announced at this month’s event the addition of a third product to its Botox line, a liquid-type botulinum toxin that it licensed from Korean biotech firm Medytox Inc. It’s about to begin a third phase clinical trial for the toxin.
Hasan said from the onset that his company’s product was designed to be complementary to, not competing with, Botox.
Evolus Hit
The acquisition wasn’t as complementary to the stock prices of two other firms that are looking to introduce competing products to Botox.
Irvine-based Evolus Inc.’s shares are off about 11% since the announcement; it counts a market value of about $505 million.
Evolus, which went public earlier this year, is aiming for a spring 2019 U.S. launch of its biosimilar product, DWP-450.
Shares of Newark-based Revance Therapeutics Inc., another competitor, are off 7% since the Bonti deal was announced; it counts a market value of about $890 million.
Revance plans to file with the FDA in the first half of next year for a frown line treatment.
Meury said Allergan expects revenue at its medical aesthetics division to grow to $7 billion to $8 billion by 2025. Last year, that division posted $3.8 billion in revenue.
