Apollo Endosurgery Wants Lap-Band To Become Even More Of An Asset

At the end of October, Apollo Endosurgery announced that it would acquire certain obesity assets from Allergan: Lap-Band, one of the most well-known brands in bariatric surgery, and Orbera, Allergan’s intra-gastric balloon system, the leading such product in Europe. It’s not unusual these days for large companies to unload under-performing businesses, but the Allergan deal is striking because of its choice of partner – Apollo Endosurgery is a small organization acquiring a much larger one.

Success is directly proportional to the amount of energy concentrated on an endeavor, and both Allergan Inc. and Apollo Endosurgery Inc. are betting on that principle. At the end of October, small and focused Apollo Endosurgery announced that it would acquire certain obesity assets from Allergan: Lap-Band, one of the most well-known brands in bariatric surgery, and Orbera, Allergan’s intra-gastric balloon system, the leading such product in Europe. (Orbera is in clinical trials in the US.) Apollo will pay $75 million in cash up front, plus a minority equity interest of $15 million and up to an additional $20 million contingent upon regulatory and sales milestones. [See Deal]

Sales of Lap-Band were way down last year from their peak – Allergan’s obesity products accounted for $243 million in...

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