Valeant Possibly Eyeing Dental Device Makers Such as Align Technology, Inc. and DENTSPLY International Inc. in 2015: Analysts

December 31, 2014
By Riley McDermid, BioSpace.com Breaking News Sr. Editor

Still-active acquirer Valeant Pharmaceuticals International is now possibly eyeing additional acquisition targets including some in the dental device market, including Patterson Companies (PDCO), Henry Schein , Align Technology and DENTSPLY International , said an analyst with Cantor Fiztgerald Wednesday.

That's news that could give the company’s shares a little New Year boost, a welcome lift after a roller coaster year for the firm.

Cantor analyst Irina Rivkind Koffler wrote in a note that Valeant will be looking for cost synergies and "strategic overlap" and added that since Patterson and Henry Schein have veterinary businesses, a sector Valeant has long coveted, they might be a good fit.

Wall Street has been speculating all fall what Valeant might go after next after its failed bid for Botox maker Allergan Inc. fell apart in October. Cowen Group analysts Ken Cacciatore and Tyler Van Buren said in a prescient and thorough report on the biotech industry in September that they thought Valeant was likely to go on a shopping spree with or without Allergan in its back pocket.

Titled “Biotechnology: Our View On The Likely Accelerating Industry Consolidation–Buckle Up,” Van Buren and Cacciatore argue that Wall Street has been far too slow—and much to unimaginative—in envisioning how biotech could look if all these deals are consummated.

“The point we are trying to make here is that the strategic thinking of Valeant might be bolder than many currently assume. Alternatively, if Valeant is unable to secure Allergan (and we don't believe they will), Valeant will likely find itself dramatically slipping down the hill after being so very close to emerging in an exceedingly powerful position,” they wrote.

Nonetheless, Valeant will likely turn rapidly to other, potentially significantly smaller, assets, such as The Cooper Companies , which has a similar business in contact lenses and would not appear to consolidate too much market share as to run afoul with the Federal Trade Commission.

“Other potential candidates are harder to envision, but clearly we believe Valeant, without Allergan, is in a significantly more disadvantageous position, and the long, difficult climb, will have to begin anew,” concluded Cacciatore and Van Buren. “Given our description of the potential targets (AMGN, CELG) that would be possible with the successful combination of Allergan, versus the potential targets (COO) without the combination of Allergan--it is now exceedingly clear to us why Valeant has appeared so aggressive/desperate.”