Allergan to Invest $200 Million in Spinoff Company

Allergan Inc. said Tuesday that it plans to invest $200 million in a new spinoff company that will focus on developing treatments for cancer, psoriasis, glaucoma and acne.

The Irvine-based drug maker said it filed plans with regulators to distribute stock in the new company--Allergan Specialty Therapeutics Inc.--to Allergan shareholders.

The new company would have only one employee and hire Allergan staff on a contract basis to continue its research and development activities, said Allergan spokesman Jeff D’Elisu.

The spinoff is intended to give shareholders the opportunity to own two distinct types of companies, he said. Allergan is engaged in production and sale of drugs and therapies, and the spinoff company would be involved in research and development.

Stockholders would receive one share of the new company for every 20 they hold of Allergan. The new company would have about 3.3 million shares outstanding.

Assuming the deal is approved, the company expects the distribution will be taxable as a dividend to each shareholder. It is expected to be completed in February.

The deal would give Allergan the opportunity to license any products that the spinoff develops. Allergan also has the option of buying back the new company. In the meantime, Allergan could remove from its own books sizable expenses for research and development activities.

The spinoff was announced after the stock market closed Tuesday. Allergan shares were off 44 cents, closing at $33.88.