Allergan PLC (NYSE: AGN) announced early on Wednesday that it would be acquiring Vitae Pharmaceuticals Inc. (NASDAQ: VTAE). The goal of this transaction is to bolster Allergan’s dermatology product pipeline, and by the looks of it Vitae shareholders couldn’t be happier to do so.

Both boards of directors have unanimously approved the transaction, however this is still subject to regulatory and shareholder approval.

Under the terms of the agreement, Allergan will purchase Vitae for $21 per share in cash, with a total transaction value of roughly $639 million.

With the addition of VTP-43742, a Phase 2 first-in-class, orally active RORγt (retinoic acid receptor-related orphan receptor gamma) inhibitor for the potential treatment of psoriasis and other autoimmune disorders, Allergan is strengthening its dermatology pipeline.

In preclinical studies, VTP-43742 has been observed to inhibit RORγt activity, is highly selective versus other ROR isotypes and may provide a treatment that could be administered as a once-daily oral dose. The compound recently completed a Phase 2 proof-of-concept multiple ascending dose trial in patients with moderate to severe psoriasis.

The acquisition also adds VTP-38543, a topical LXRβ (Liver X Receptor beta) selective agonist for the potential treatment of atopic dermatitis. VTP-38543 is currently in a Phase 2a proof-of-concept clinical trial assessing the safety, tolerability and efficacy in patients with mild to moderate atopic dermatitis.

Brent Saunders, CEO and president of Allergan, commented:

The acquisition of Vitae is a strategic investment for Allergan that adds strength and depth to our innovative medical dermatology franchise. Vitae has pioneered the discovery and development of highly differentiated first-in-class compounds in atopic dermatitis, psoriasis and autoimmune diseases, areas of medicine where innovation is needed for patients.

Shares of Allergan were trading up 2.8% at $246.80 on Wednesday, with a consensus analyst price target of $299.06 and a 52-week trading range of $195.50 to $322.68.

Vitae shares were last seen up 158% at $20.90, with a consensus price target of $18.75 and a 52-week range of $4.08 to $18.71.

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