Sector News

How the Actavis deal upended Allergan No. 2’s CEO ambitions

February 4, 2015
Life sciences
(Reuters) – For two decades, Allergan Inc president Doug Ingram labored to transform the Botox-maker from a sleepy eye care upstart to a global aesthetics giant. He was just a few months away from getting the top job when a merger deal with Actavis Plc in November thwarted his ambitions.
 
Ingram has now accepted an advisory role to facilitate the merger and will soon be looking for a job outside the combined company. Allergan’s derailed succession plans, disclosed by Ingram and other top executives in interviews with Reuters, underscore how corporate mergers can leave even some of the industry’s top executives in the cold.
 
To be sure, Ingram has many options. While he is currently focused on helping Allergan and Actavis with their integration, he has already received interest from other healthcare companies as well as private equity firms, he said in an interview, declining to name them.
 
“(The merger) is bittersweet for me personally. We had a really exciting vision for this company and people were very much behind me,” Ingram said.
 
Ingram will get more than $26 million in cash, stock and benefits as a payout for the merger, a regulatory filing shows. His total compensation in 2013 was $3.6 million.
 
Ingram focused on running Allergan’s core business over the last year while 61-year-old CEO David Pyott, who was preparing for his retirement, served as Allergan’s public face and met with investors to defend the company from a hostile bid from Valeant Pharmaceuticals International Inc (VRX.TO).
 
Ingram also spearheaded $475 million in cost cuts for calendar 2015. He also helped create the company’s European operations and led a landmark free speech lawsuit that challenged U.S. policy on drug promotion.
 
“He has to be on everybody’s dance card if you are looking for a CEO of a substantial, complicated, global company,” Pyott said about Ingram. “Here is a person that was very ready to take over.”
 
A serial marathon runner known for sending out e-mails at 3 a.m., Ingram is a sociable executive who keeps a guitar in his office and likes to jam with his colleagues, often to the tune of Led Zeppelin’s ‘Stairway to Heaven’.
 
Ingram’s status as a key Allergan insider, pivotal to the success of the $66 billion deal with Actavis, was reaffirmed just last week, in a one-on-one dinner with Actavis CEO Brent Saunders.
 
Saunders had flown to California for a three-day round of meetings with Allergan. Included in his agenda was meeting Ingram, who picked up Saunders from his hotel in his white Tesla and drove to steak and seafood restaurant Mastro’s in Orange County to discuss integration strategy.
 
Ingram joined Allergan in 1996 as its chief litigation counsel after spending six years as a corporate lawyer.
 
He quickly rose the ranks, yet despite his internal success, Ingram is little known to the investor community.
 
“Doug has been a vital part of the company’s strategy and success,” said Matthew Maletta, Allergan’s associate general counsel who has worked with Ingram since 2001. “I have been a stockholder in Allergan forever and I would buy more if Doug was getting the CEO job.”
 
(Reporting by Olivia Oran and Nadia Damouni in New York; Editing by Bernard Orr)

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