Sector News

Activist investor's new advice for Amgen: Merge with Allergan

November 18, 2015
Life sciences

Dan Loeb, the activist investor who once called for Amgen to break itself in two, is now advising the Big Biotech to consider merging with Allergan, according to Bloomberg.

Citing sources at a closed-to-the-press meeting in New York, Bloomberg reports that Loeb talked up the potential of such a merger to a group of investors, saying it would create new avenues for growth and cost synergies. Through Third Point, his hedge fund, Loeb owns stakes in each company.

The idea stands in stark contrast to Loeb’s most recent advice for Amgen. Last year, Loeb urged the company to take a page from Abbott Laboratories and split in two, leaving one entity to handle Amgen’s legacy drugs, like the blockbusters Neulasta and Enbrel, and forming a spinout that would carry forward with the unapproved pipeline. Echoing some industry analysts, Loeb took issue with Amgen’s big spending on high-risk R&D and bemoaned a track record of buyouts that hasn’t won many fans on Wall Street.

But such calls for a split have largely quieted in the year since, as Amgen laid out plans to cut roughly 4,000 jobs–20% of its payroll–and save about $1.5 billion in the process. And, on the research side, some of those moonshot projects have come to fruition, highlighted by the recent approvals of the cholesterol drug Repatha and cancer immunotherapies Imlygic and Blincyto.

Still, despite its recent embrace of Big Pharma-like cost cuts and stock buybacks, Amgen stands apart from Allergan, a company that has largely eschewed early-stage research in favor of buying into new therapies when they’ve already demonstrated some promise. Allergan CEO Brent Saunders has recently walked back some of his more strident remarks about the folly of Big Pharma-led drug discovery, but his company is not about to become a major R&D spender. Allergan has touted its plans to put $1.7 billion into R&D this year, whereas Amgen spent $200 million more than that in the first half alone.

And Allergan is, at least for the moment, otherwise engaged. The company disclosed last month that Pfizer made a much-anticipated merger pitch of its own, and the two are now in self-described friendly conversation about the idea. Allergan’s Irish address and attendant tax benefits make it a particularly desirable target for Pfizer, and some analysts believe a framework agreement could come this month.

By Damian Garde

Source: Fierce Biotech

Join the discussion!

Your email address will not be published. Required fields are marked *

Related News

November 27, 2020

AbbVie lifts insider Jeffrey Stewart to commercial chief as company veteran Carlos Alban retires

Life sciences

AbbVie will soon have a new chief commercial officer, who’ll assume the heavy responsibility of navigating the Illinois pharma’s marketing transition from megablockbuster Humira.

November 27, 2020

Belgium biotech argenx nabs Bayer speedy review voucher for a cool $98M

Life sciences

The biotech, which has a series of deals across Big Pharma, will use the voucher, which can speed up the regulatory process for a new drug, for its late-stage drug efgartigimod—but not in the indication you might think.

November 27, 2020

Galapagos sells off Fidelta as CRO activities ‘no longer fit with its strategy’

Life sciences

Galapagos is selling off its contract research organization Fidelta for $37 million to Polish life science company Selvita. Fidelta focuses on inflammation, fibrosis and anti-infectives, with 181 employees at the helm.

Send this to a friend