Botox Maker Allergan to Buy Drug Firm for $230 Million

Allergan Inc., maker of Botox anti-wrinkle treatments, said Tuesday that it had agreed to buy Oculex Pharmaceuticals Inc. for about $230 million in cash.

Irvine-based Allergan has been shifting its focus to pharmaceutical sales after last year spinning off a business that makes eye-surgery devices. Closely held Oculex develops products to treat eye diseases such as those caused by diabetes, Allergan said.

The company said it expected to complete the purchase by the end of November. It plans to start final-stage clinical trials of Sunnyvale, Calif.-based Oculex’s experimental treatment Posurdex -- an implant that delivers dexamethasone to the back of the eye -- early next year. The technology developed to deliver this drug may work for other drugs as well, Allergan said.

“This positions Allergan for a longer-term opportunity in the back-of-the-eye market, and that’s the Holy Grail of eye care,” said Timothy Chiang, an analyst at Natexis Bleichroeder Inc. “All the therapies today are front-of-the-eye treatments.”

Shares of Allergan fell 50 cents to $79 in New York Stock Exchange trading.

Allergan said it would record 75% to 90% of the purchase price as a research and development expense in the fourth quarter of 2003.

“This area of research at Allergan is all preclinical, so this jumps the company forward,” spokesman Jeff Richardson said.