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Allergan Escapes Valeant

The Allergan / Valeant saga has come to an end, with Allergan fighting them off by doing a deal to be taken over by Actavis. No word yet on whether they’are going to let Allergan keep the invisible golf course.
Valeant is, of course, famously tight-fisted (which is why Allergan had no desire to be taken over by them), and the Actavis price was about six billion dollars higher than what Valeant said that they were willing to pay. One wonders if all six billion dollars were necessary to get them to go away, but Activis must have run their own numbers. If the deal turns out to be a success, it might cause people to look with suspicion on any future Valeant bids for other companies, though.
That Reuters story says that the combined companies expect to have an R&D budget of $1.7 billion. Allergan’s current spending is around 1 billion (and falling), and Actavis’ was 0.62 billion before its most recent acquisition, so we may have another M&A case of one plus one equaling about 1.8. Still, if it had been Valeant, one plus one would have equaled about 1.04, so there is that. Actavis does spend less on R&D as a percentage than Allergan does, though, so there is that.

2 comments on “Allergan Escapes Valeant”

  1. Oskar says:

    As an Actavis employee I have no idea what to think. I have been there for 4 years and in that time we went from a medium size generic to this behemoth we will be in 2015.
    Oh well nothing to do but slog on.

  2. Marko says:

    Actavis growth story is really one for the history books. Only 5 years ago their market cap was $5 billion, just few days ago they acquired Allergan for $66 billion, astonishing.
    Actavis is a generic pharma company – this is why they spend less percentage on R&D; while Allergan is an originator. I can hardly wait to see how this new aquisition will work out for Actavis.

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