By Debbie Strickland
Allergan Inc. is putting up $200 million in cash to launch a new, publicly traded company, Allergan Specialty Therapeutics Inc. (ASTI), charged with creating and developing products based on retinoid and neuroprotective technologies.
The new company permits Irvine, Calif.-based Allergan to dissociate itself from the risks and expenses of some of its research and development programs, including certain projects from the portfolio of Allergan Ligand Retinoid Therapeutics Inc., the recently ended joint venture between Allergan and San Diego-based Ligand Pharmaceuticals Inc.
Allergan shareholders will receive one share of Class A common stock in ASTI for every 20 shares of Allergan they own, for a total of 3.3 million shares. The company expects to distribute the shares in February 1998, and has applied for a listing on the Nasdaq National Market under the symbol ASTI.
Allergan will hold all 1,000 shares of Class B stock, giving the company the right through 2002 to buy out its affiliate for a minimum of $60 million.
As for the start-up cash, Allergan plans to borrow some or all of it from third parties, but will likely receive most of it back, since, according to the prospectus, "ASTI is expected to utilize substantially all of its available funds to reimburse Allergan for reset and development costs." Expenses and plans, however, are subject to approval by ASTI's independent board of directors.
Allergan, which has the option to license any products and technology developed by ASTI, is initially turning over four drug candidates to its affiliate:
* Tazarotene, an orally delivered RAR beta gamma-selective agonist under development for the treatment of cancer, acne and psoriasis;
* Memantine, a glutamate blocker designed to halt the progression of optic nerve damage that leads to blindness in glaucoma patients;
* AGN 4310, an RAR antagonist that acts as a topical antidote to systemic retinoid-induced mucocutaneous toxicity (a common side effect associated with the use of systemic retinoids such as Accutane) and is a potential topical treatment for psoriasis;
* And a compound to be selected from the RAR alpha-selective agonist class of retinoid compounds for the treatment of various cancers.
The most advanced of the drug candidates is Memantine, already approved in 14 countries for various neurological disorders, including dementia, Parkinson's disease and cerebral and spinal spasticity. In September, Allergan filed an investigational new drug application for the product as a treatment for glaucoma, and a Phase I/II trial in that indication started in October.
Two Phase III trials are planned to begin in 1998. Allergan has the option to license any products and technology developed by ASTI.
Oral Tazarotene, which Allergan already markets in a topical formulation, is expected to enter clinical trials in 1998. *