Sector News

CEO’s latest forecast: A ‘vast value gap’ between Allergan and Valeant

October 9, 2014
Life sciences
Allergan has been insisting for months that Valeant’s buyout offer is “grossly inadequate” and “substantially undervalues” the company. Now that Valeant has upped its bid by $4.5 billion? Same deal, the Botox maker says, citing its own rosy earnings forecast.
 
As Allergan announced Thursday, its third-quarter earnings will reach the $1.76 to $1.78 per share range, topping its previous forecast of $1.44 to $1.47. And earnings this year, next year, and even the year after that will be higher than analysts are projecting, the company said.
 
The drivers? Market growth, market share increases and new regulatory approvals, to name a few. And that’s reason enough to knock Valeant’s proposal, CEO David Pyott figures.
 
“Today’s announced expectations for the third quarter and updated future outlook further demonstrate that there is a vast value gap between Valeant’s offer and the intrinsic value of Allergan,” he said in a statement.
 
Valeant announced its own update on its third-quarter expectations late last month, claiming its revenue results would beat consensus and its EPS would pass its original guidance. According to Reuters’ sources, unveiling “blow-out” earnings on Oct. 20 was all part of its buyout plan. The impressive results would have led to a share price jump, boosting the value of its bid for Allergan before Valeant sweetened the offer further.
 
But then Actavis got in the way. The company–which Allergan recently rebuffed to pursue its own acquisition target, Salix–is reportedly looking at coming back for a second try, and Valeant moved quickly to fend off the white knight, Reuters says.
 
Now, some analysts are predicting that NJ-based Actavis might have the edge if it puts up an offer north of $200 per share. “While we wouldn’t rule out a higher bid given the exceptional circumstances associated with this deal, we would view it as unusual for [Valeant] to get into a public bidding war,” Leerink Partners analysts Jason Gerberry and Seamus Fernandez wrote in a note to investors Wednesday.
 
By Carly Helfand
 

comments closed

Related News

February 4, 2023

MedTrace receives U.S. patent for diagnosing the human heart

Life sciences

The U.S. Patent and Trademark Office issued a patent to MedTrace for their method of diagnosing the human heart via 15O-water PET. The patented method is the foundation of the company’s software aQuant, currently under development. Hendrik “Hans” Harms, PhD and Senior Scientist at MedTrace, and Jens Soerensen, Professor and Clinical Advisor to MedTrace, are the originators of the method.

February 4, 2023

Roche taps insider Teresa Graham for top pharma job as setbacks prompt M&A questions

Life sciences

Teresa Graham, currently head of global product strategy for Roche pharma, will become the division’s new CEO next month, Roche said Thursday. Simultaneously, Roche is elevating Levi Garraway, chief medical officer, to the executive committee.

February 4, 2023

J&J’s pharma group quietly works through global overhaul, with layoffs expected to reach multiple countries

Life sciences

Fierce Pharma has obtained internal documents and video of a town hall meeting conducted this week describing what J&J called a “comprehensive review” of its portfolio. Moving forward, J&J plans to operate its vaccines and infectious diseases outfits as one group, the executives explained.

How can we help you?

We're easy to reach