Allergan announced on Sunday that it is spending $560 million in cash to purchase Naurex, a drug manufacturing company known for the development of antidepressants. The deal came amid news that Allergan is in talks with Israel-based Teva to sell its generic drug division for $45 billion.
People familiar with the matter told the Wall Street Journal that the Teva deal would be announced on Monday. The Dublin-based drugmaker plans to merge its drug unit with Teva, which is known for its huge production of generic drugs. Allergan, formerly known as Actavis, is known for its Botox treatment.
Naurex, on the other hand, is currently developing antidepressant drugs which are showing promising results and its intravenous treatment and oral depression treatment are currently being studied. Discussions regarding the the deal began late last year.
"The bottom line is it's an incredibly exciting opportunity to change the paradigm in mood disorders particularly in depression and perhaps suicidality," Brent Saunders, Allergan's chief executive, told Forbes. "Depression remains one of the largest unmet areas of medical need. When you think about existing therapies, they have modest effects with lots of side effects."
Allergan will pay $460 million to close the deal then another $100 million by January 2016. The Naurex deal is expected to close by the end of 2015.