Botox maker Allergan in talks with new suitor

US Botox maker Allergan Inc yesterday said that it is in talks with s new suitor.

Though Allergan did not name the proposed new suitor, some media reports speculated it was Actavis Inc.

Allergan, which is fending off a $54-billion hostile takeover from Valeant Pharmaceuticals International, said in a regulatory filing that it is in talks with a third-party that may lead to merger negotiations.

"We have been approached by another party regarding a potential merger transaction," Allergan said in an SEC filing. "Discussions between us and that party have continued and may lead to negotiations. Our board has determined that premature disclosure with respect to the possible terms of any transaction might jeopardize continuation of any discussions or negotiations.''

The Irvine, California-based company did not elaborate in the filing nor did it disclose the suitor's name.

Valeant, Canada's biggest drug maker and one of the most aggressive acquirers had formed a joint venture with activist investor William Ackman's Pershing Square in February to acquire a 9.7-per cent stake in Allergan and in late April tabled an unsolicited $45.7-billion cash and stock bid.

It later raised the offer price twice to nearly $54-billion in order to get Allergan directors to come to the negotiating table (See: Valeant raises offer for the second time this week for Allergan to $53.8 bn).

But Allergan has steadfastly rejected Valeant's offers, which led to Ackman going to court to force a shareholders' meeting on 18 December to vote on Valeant's and his joint bid.

Allergan in turn accused Ackman of violating SEC insider trading rules where Ackman's Pershing Square, a large Valeant shareholder, had acquired a huge chunk of Allergan stock before Valeant disclosed plans to make a bid for Allergan.

Allergan sought a court injunction to stop Ackman from using his 9.7-per cent stake in voting in the shareholders meeting.

A California court however ruled in Ackman's favour, but ordered that Pershing Square and Valeant disclose details of their joint venture agreement and raised serious questions on whether Valeant and Pershing Square violated insider trading rules by buying Allergan shares without publicly disclosing information about their plans of tabling a bid.

Founded about 60 years ago, Allergan is a global specialty pharmaceutical company whose product range includes ophthalmic pharmaceutical, dermatology and neurological products.

Apart from Botox, Allergan's dry-eye drug Restasis generated about $940 million, its breast-implant business $378 million and $100 million through Latisse, its prescription drug that increases the length of eyelashes.

Allergan, which spends about 17 per cent or about $1 billion a year of its revenue on research and development of new drugs, has 11,400 employees and manufacturing plants in Texas, Ireland, and Costa Rica.

Its sales are projected to grow every year to $9 billion in 2018 from $6.3 billion in 2013, according to the average of analysts' estimates compiled by Bloomberg.

Valeant, which has a history of aggressive deal making, is a multinational specialty pharmaceutical company that develops a broad range of pharmaceutical products, primarily in the areas of dermatology, eye health, neurology, and branded generics.

Valeant has a product portfolio of about 490 products, and has two drugs in the top 200 drugs by sales in the US. Its main markets are in the US, Canada, Mexico, Brazil, Europe and Australia.

The company, which has a market cap of C$49.3 billion and annual revenues of $5.8 billion, does not spend billions of dollars on R&D, but instead acquires rivals with established products and quickly integrates and cut costs in the acquired company and moves on to the next deal.

It has made over 60 acquisitions since 2008.

Actavis, the world's third-largest generic drugmaker, changed its name in 2013 after New Jersey-based Watson Pharmaceuticals acquired its Swiss rival Actavis, for around $5.60 billion in order to expand in Europe. (See: Watson Pharmaceuticals to buy Swiss rival Actavis for $5.60 billion)

Actavis has a market value of $67.1 billion and generated revenue of $8.7 billion last year.

Actavis develops generic, branded generic, legacy brands and Over-the-Counter (OTC) products in more than 60 countries.

The company is ranked among the top three in 12 global markets, the top 5 in 16 global markets, and in the top 10 in 33 global markets.

Actavis has one of the broadest product portfolios and strongest pipelines in the generics industry. It has more than 750 molecules in 1,700 dosage combinations marketed globally through operations in more than 60 countries and around 40 per cent of its generic drug revenue comes from outside the US.

The company is in leading market positions in key established commercial markets and emerging markets in Central and Eastern Europe, Russia, the UK, France and Australia.

It has 30 manufacturing and distribution facilities around the world, including in China, India, Indonesia and Singapore.