DUBLIN – Just two days after completing its branding makeover, Dublin-based Allergan plc (formerly Actavis plc) was back at its old M&A game, buying up a different kind of makeover specialist, Kythera Biopharmaceuticals Inc., in a cash-and-shares deal which values the latter at $75 per share or about $2.1 billion.

The takeout price represents a 24 percent premium on the closing price of Kythera's stock (NASDAQ:KYTH), which closed Tuesday at $60.72. Shares in the company closed Wednesday at $74.11, up 22 percent. Investors in Westlake Village, Calif.-based, Kythera will receive 80 percent or $1.68 billion of the total in cash. The rest will be paid in newly issued Allergan shares.

That structure enables Allergan to retain its investment-grade rating "and keep some firepower for further deals," Allergan CEO Brent Saunders told analysts on a conference call.

Kythera is named after the Greek island that was the birthplace of Aphrodite, the goddess of love and beauty. But the firm's portfolio is directed at those who consider themselves in need of a little help in that department.

Its lead product, the fat-burning injectable drug Kybella (ATX-101; deoxycholic acid) gained FDA approval on April 29 for reducing excess submental fat below the chin, a condition more commonly known as double chin. It's the first nonsurgical approach to treating a condition that affects almost 70 percent of Americans and has attracted a peak sales forecast of $500 million from Leerink Partners LLC analyst Seamus Fernandez.

Allergan aims to do better.

"We really do believe that leveraging our position in facial aesthetics will allow this product to grow faster, and will be bigger than it would be if Kythera were to do it on its own," Saunders said. Allergan's other products in this segment include Botox (onabotulinumtoxinA), Juvéderm XC (cross-linked hyaluronic acid) and Juvéderm Voluma XC fillers, the eyelash treatment Latisse (bimatoprost ophthalmic solution), and the Skinmedica skincare range.

It is, said Allergan, "a pivotal entry point for expanding use of facial aesthetic products in men." A commercial launch is slated for the third quarter. In the meantime, Kythera is engaged in physician training. It has yet to disclose the price for the treatment, which is administered as a set of up to 50 injections in a single session. Patients can undergo up to six individual treatments, although many see improvements after two to four treatments.

As the transaction will not close until the third quarter – and only if Kythera shareholders vote in its favor – Allergan has not been involved in pricing the product. "We have had some very high-level conversations about pricing," Saunders said. "We can't control it, but we certainly understand what they're doing and support what they're doing."

The deal is expected to be earnings-neutral in 2015. Kythera exited the first quarter with $211.7 million in cash, so it has plenty of fuel for the initial commercial rollout of Kybella and to seek approvals in other markets. Allergan said the acquisition would break even in 2016 and would be profitable thereafter.

Kythera also is developing KYTH-105 (setipiprant), an oral prostaglandin D2 antagonist, for treating male pattern baldness. It licensed rights to the compound from the University of Pennsylvania, whose head of dermatology, George Cotsarelis, discovered the effect, and Allschwil, Switzerland-based Actelion Ltd. The latter firm had tested the drug in a phase III trial in allergic rhinitis without success. The baldness program is nearing an investigational new drug application submission.

The acquisition is of the bolt-on rather than the mega variety. It is akin to its recent takeovers of gastrointestinal disease specialist Furiex Pharmaceuticals Inc., for $1.1 billion plus a contingent value right worth $360 million and of generics firm Auden Mckenzie Holdings Ltd. for £306 million (US$481 million). Its $66 billion acquisition of Allergan (when it was still called Actavis), which closed in March this year, and its $25 billion takeover of Forest Laboratories Inc., which closed in July last year, are in a different league.

The deal bundles up yet another set of pharmaceutical assets into an Irish-domiciled entity, in the same week that the European Commission launched a new initiative, the Action Plan for Fair and Efficient Corporate Taxation in the EU, intended to tackle tax avoidance ploys which many firms exploit in Europe.