“The company doesn’t need large acquisition; instead, it wants to stay focused on its ‘stepping stone’ strategy”. This was said by the CEO of botox maker Brent Saunders on Monday, when the followers of Allergan were asked about whether or not there was a chance that a transformative deal could come down the pike.
Biotech giant Biogen (BIIB) has, in recent times, been rumored to be the acquisition target of Allergan. When Saunders was asked by investors on Monday if Allergan was planning to do anything big, his reply was that Allergan does not plan on doing any big M&A for now. In fact, he was of the view that Allergan would currently maintain its focus on minor deals, or to use his words, “tuck-in” or “bolt-on” deals. He cited his confidence in the growth of the company and further stated that he believed that the existing commercial business of the company would last for a long time.
Saunders added that his company would use a disciplined and focused approach when making deals, stating that they would not make a deal just for the sake of making one. According to Saunders, there were ample opportunities at their disposal and that they would properly evaluate each of them and then do the right deals when the time is right.
Headquartered in the capital of Ireland, Dublin, Allergan has just revealed that it has sold its generic drug business to Teva Pharmaceutical Industries Ltd. (TEVA), a week back. This was done following a detailed regulatory review procedure, which resulted in Allergan receiving $33.4 billion in cash while TEVA had $5.4 billion in its stock.
The deal was granted clearance by the Federal Trade Commission a week earlier, after it gave the green signal to the biggest drug divestiture order in the history of merging of pharmaceutical companies. The deal had been announced back in July 2015, and was then valued at $40.5 billion.
On Monday, Allergan announced an increase in net revenue of 1% in its second quarter this year compared to previous year, up from $3.64 billion to $3.69 billion. It also received non-GAAP diluted earnings per share of $3.35, which was an increase of 9% from the previous year’s value of $3.06.
Allergan’s shares were also down by 2.8% to $245.86 on Monday morning.