In November, Actavis announced it was acquiring Allergan in a $66 billion acquisition, thus thwarting a 7-month effort by Valeant Pharmaceuticals.
Listen to Brent Saunders, CEO of Actavis, and David E.I. Pyott, chairman and CEO of Allergan, discuss the Actavis acquisition of Allergan and what it means to the eyecare market. The podcast also outlines Allergan’s main points of resistance to the Valeant offer and what the future holds for Pyott following 17 years at the helm of Allergan.
In November, Actavis announced it was acquiring Allergan in a $66 billion acquisition, thus thwarting a 7-month effort by Valeant Pharmaceuticals-and William Ackman, chief executive officer (CEO) of Pershing Square Capital Management-to acquire the multispecialty pharmaceutical company through a hostile takeover.
Though some industry observers may view Actavis as “a white knight” in its acquisition of Allergan, the principles involved view the deal as an opportunity to create one of the “most dynamic growth pharmaceutical companies in the world.”
Brent Saunders, CEO of Actavis, and David E.I. Pyott, chairman and CEO of Allergan, outlined the details of the acquisition, what it means for both companies, and, most importantly, to the eyecare market in an exclusive interview with Ophthalmology Times.
“The combined companies will have pro forma of revenue of about $23 billion dollars in 2015, and we’ll be a leader in categories like ophthalmology, medical aesthetics, neurology, gastrointestinal, and women’s health among other areas,” Saunders said. “We’re excited about creating one of the fastest-growing, most dynamic pharmaceutical companies in the world.”
Saunders looks at the acquisition as a marriage of two great companies.
Both companies are incredibly well run and both are committed to customer service, to innovation, and to our employees,” he said. “When we put these two companies together, we’re looking to really accelerate our commitment to innovation and customer service.”
Pyott said the values of both companies are exactly the same, which the primary focus is on the customer-the physician or the patients served by the physicians-and innovation. He added that Allergan would contribute solid assets to the combined company.
“I’m really looking forward to see how this combined management team really executes on this new genre of growth pharma and the dynamism,” Pyott said, “which I think will be really a beacon for everybody in the pharmaceutical and medical device industry.”
Saunders explained that when a deal of this magnitude is developed, there is something special about the company-and clearly that is the case with Allergan.
Saunders added that one of the most impressive points about Allergan is the people and their capabilities. This is not about an acquisition and merging it under the Actavis umbrella. Saunders outlined that Actavis will preserve what made Allergan great, and treat the situation more of a merger than an acquisition.
“What you’ll see us doing is really putting our customers at the center of everything we do to make sure that we continue to provide excellent customer service, a commitment to education, and training for physicians and, of course, innovation,” Saunders said.
Both executives see a synergy existing between the two companies that make the acquisition a solid fit. Saunders sees synergies in the area of revenue and enhancing the Actavis’ business capabilities.
He explained that Actavis has strengths in areas where Allergan was weak, and vice versa. As an example, Saunders alluded to the “geographic footprint” of the companies. In Western Europe where Allergan has great strength, Actavis did not have a strong presence. The same holds true in Latin America. Meanwhile in Eastern Europe, Actavis is stronger.
“Now, combined we have not only a good presence, but we have more product flow,” Saunders said. “Our global position and our ability to service customers around the world only gets stronger.”
Pyott sees plenty of synergies between both management teams. He added that he is very impressed by the strength of the Actavis management team, and expects both teams to work together at a high level, even a willingness to share best practices.
“Very quickly, my belief is it won’t be a case of us and them, but us, all together,” Pyott said. “That’s very exciting when organizations like this come together.”
Actavis also plans to retain Allergan as a brand. Saunders said Actavis is spending time talking to its customers and really understanding how to use both brand equities, in what order, and or under which label.
“The Allergan name and the Actavis name both have great value in different parts of the medical community,” Saunders added.
As the two companies integrate, the policies and procedures should have seamless implications for the ophthalmic and eyecare markets. Saunders pointed out that the goal is to make the integration absolutely seamless for customers, making sure the ophthalmology and eyecare groups of the company continue to support customers with great customer service, with solid information, with education, and with innovation.
“Over the long term, we’re absolutely dedicated to supporting the eye health community,” Saunders said, “to continuing to drive product innovation through research and development (R&D) and through bringing both products and perhaps devices in the future to help ophthalmologists and optometrists build their practices.”
Saunders also emphasized that Actavis is steadfast in its commitment to R&D.
One of the major issues within the eyecare communities during the Valeant takeover attempt was the argument of R&D (See “Focus on efficient R&D pays dividends for physicians, patients” (http://bit.ly/1wIDPzw) and “Future of ophthalmic innovation is through R&D partnerships” (http://bit.ly/1JaXnSr). Saunders reassured physicians, doctors, and researchers that R&D is important.
“R&D is the lifeblood of the industry,” Saunders said. “It’s the lifeblood of ophthalmology! So you will see us continue to invest in all the wonderful pipeline programs that are in the Allergan portfolio and (we) continue to look to add to them."