Cosmetic industry news Archives

The news is finally out. Botox maker Allergan and US drug giant Pfizer have announced they are to merge in a deal worth a staggering $160 billion.

The merger between the two former rivals creates a new pharmaceutical ‘supercompany’ which is set to be officially the world’s largest pharmaceutical company by sales.

There had long been talk about an Allergan buyout. Indeed, on our blog last year, we covered the unsuccessful takeover bid made by Valeant.

Now this new deal secures the long-term future of the company, and ushers in exciting new possibilities to research, discover and deliver more medicines and therapies.

The future for Allergan

The new company has a combined pipeline of more than 100 mid-to-late stage programmes currently in development.

And with dramatically increased resources to invest in R&D and manufacturing in future, we’re likely to see some incredible innovations in the cosmetic industry in the not-too-distant future.

As Brent Saunders, Chief Executive Officer of Allergan, says:

“The combination of Allergan and Pfizer is a highly strategic, value-enhancing transaction that brings together two biopharma powerhouses to change lives for the better. This bold action is the next chapter in the successful transformation of Allergan allowing us to operate with greater resources at a much bigger scale. Joining forces with Pfizer matches our leading products in seven high growth therapeutic areas and our robust R&D pipeline with Pfizer’s leading innovative and established businesses, vast global footprint and strength in discovery and development research to create a new biopharma leader.”

What does it mean for you?

This soon after the event, it’s difficult to say what – if any – impact the merger will have on you and your business in the coming months.

But at Cosmetic Courses, we have a great relationship with Allergan and are in frequent close contact. As soon as we know about any changes that are likely to affect you, we’ll of course be sure to let you know as soon as we can. So do keep an eye out on our blog, newsletters and social media channels.

For the time being, it’s business as usual – albeit with some exciting new possibilities on the horizon.

Who knew a takeover bid in the pharma industry would be so thrilling? The battle between Allergan Vs Valeant is shaping up like an epic tennis match, with shot after shot screaming back over the net.

The last was from Valeant, who announced they were seeking to bypass Allergan’s board of Directors and take their hostile bid directly to shareholders.

But now Botox maker Allergan have hit a blistering return. To head off the $53 billion hostile takeover bid, the board are preparing a slew of measures – including taking on debt to buy back their own shares.

Also on the table is a plan to make acquisitions of its own (anything Valeant can do…), as well as a round of spending cuts to increase shareholder value, according to Chief Executive David Pyott.

The hope is that these measures will be enough to persuade shareholders that Allergan is better off going it alone.

It’s thought that Allergan will officially reveal their masterplan when they release their second-quarter results later this month. But even then it seems the battle won’t be over.

Valeant have hit back, saying they already have enough shareholders on side to call a meeting to try and replace Allergan board members with nominees who support their takeover bid. They need the support of shareholders who hold at least 25% of the company’s shares.

Financial Analyst Ronny Gal says that while it’s possible for Allergan to swing things in their favour, they will find it challenging.

“When I run my numbers, a buyback alone doesn’t quite cut it. A buyback plus another round of cost cuts, or the acceleration of the discussed cost savings, does.”

An acquisition could help them, according to Gal, but only if it increases their profits – and quickly. To win round short-term investors, he says, Allergan needs to deliver another $10 per share in 2015 or $11 per share in 2016.

Get comfortable. Allergan Vs Valeant is going to run and run…