Could There be a Marriage Between Valeant and Allergan?
September 15, 2016
By Alex Keown, BioSpace.com Breaking News Staff
DUBLIN – Once an aggressive M&A monster, beleaguered Valeant Pharmaceuticals could now be the target of a takeover. But one company that is not likely to make a bid for the Canadian company is Allergan .
During an interview with CNBC’s Meg Tirrell, Brent Saunders, chief executive officer of Allergan, was asked if Valeant, which has struggled for the last year as it was rocked by multiple scandals, could be a target for Allergan. Saunders said that such a scenario was not likely, given that Allergan was pursuing a “growth pharma” model when it comes to acquisitions.
“We have been inquisitive, without questions. But every one of our acquisitions or deals has been growth oriented. We look to buy young products that we think we can put into our hands and do better with and really grow,” Saunders said, according to the CNBC transcripts. “… best as I can tell, Valeant just doesn’t fit that bill.”
In the wake of Allergan’s merger with Pfizer falling apart earlier this year, the Irish company has been aggressive in its M&A activities. But, as Saunders said, those deals are for products that Allergan believes it can grow and develop into strong revenue generators. Saunders told CNBC the company is looking at “stepping stone deals,” deals where Allergan can “really add to the therapeutic presence and look for cured and treatments for unmet need.” Such a move leaves out Valeant. Saunders said Allergan is not looking at acquiring a fixer-upper of a company, or in his words, “transformational M&A.”
Some of those stepping stone platforms that Saunders talked about include a deal announced Wednesday. Allergan struck a $639 million deal to acquire the Pennsylvania-based Vitae Pharmaceuticals and its experimental oral psoriasis treatment, VTP-43742 and other dermatological products.
Earlier this month the company struck a $60 million upfront deal to acquire gene therapy company RetroSense Therapeutics. In August the company bagged the Bay Area’s 1014688 to gain that company’s glaucoma product. In April, Allergan acquired Boston-based Topokine Therapeutics and its lead product, XAF5, a first-in-class topical agent to treat steatoblepharon, better known as bags under the eyes. One day after the Pfizer deal fell through, Allergan entered into an agreement with Heptares Therapeutics for exclusive global rights to a portfolio of novel subtype-selective muscarinic receptor agonists for the treatment of several neurological disorders, including Alzheimer’s disease.
For its part, Valeant is undertaking a strategic reorganization that includes rebuilding trust between clients and investors. Part of that work is attempting to appease the company’s creditors for failing to meet several financial reporting deadlines, which triggered default notices. Valeant has an estimated debt of $30 billion, largely due to its aggressive M&A practices.
As part of its new strategic focus, Valeant said it has begun to streamline its portfolio with sales of the brodalumab EU rights, Synergetics USA OEM business and Ruconest for a total combined upfront payment of $181 million and additional consideration up to $329 million for achieving specific approval and sales milestones, the company said. Additionally, Valeant said all North American rights to Ruconest will be sold to Pharming Group N.V. for up to $125 million.