Allergan to acquire Tobira in deal worth potential $1.7bn

Dublin-based pharmaceutical giant Allergan has agreed a deal to buy Tobira Therapeutics, a small firm which develops drugs to treat NASH disease.

The acquisition was completed at a price of $28.35, a 500% premium on Tobira's closing price of $4.74 per share.

According to a statement released by Allergan, the price may even reach $49.84 a share if certain performance expectations are met. This would value the company at $1.7bn.

"Allergan will acquire Tobira for an upfront payment of $28.35 per share, in cash, and up to $49.84 per share in Contingent Value Rights (CVRs) that may be payable based on the successful completion of certain development, regulatory and commercial milestones, for a total potential consideration of up to $1.695 billion," the press release from the Dublin company said.

Tobira is currently developing two drugs which are used to treat NASH, an illness which is caused by a build-up of fat in the liver. Cenicriviroc (CVC) and Evogliptin could be the moneyspinners for Tobira, whose previous market capitalisation was only $89m.

Pre-market trading showed a 572% increase in Tobira's shares to $31.85 per share, with Allergan's price down slightly.