Sector News

Think Allergan CEO’s ‘all-consuming’ Valeant fight won’t happen to you? Think again

February 10, 2015
Life sciences
Fending off a hostile bid last year from partners Valeant ($VRX) and activist investor Bill Ackman wasn’t just a lot of work, according to Allergan CEO David Pyott. It was a full-time job.
Pyott Tuesday called the months-long process “all-consuming” on CNBC’s “Squawk Box,” recounting how he tasked President Doug Ingram and Chief Science Officer Scott Whitcup with handling day-to-day operations while he focused his own efforts on the takeover battle.
“‘I will concentrate on the raiders, investors, public relations, all of the above,'” he said, recalling what he’d told them after the first Valeant-Ackman bid hit in late April.
Ultimately, his efforts paid off, with Allergan successfully fending off its hostile suitors long enough to arrange a $66 billion merger with white knight Actavis. Pyott says the team “constantly ramped up” its performance, too, accounting for part of the $20 billion stock increase since Valeant’s first offer.
Pyott may serve as an example for pharma’s embattled CEOs of the future–and the way EY’s analysts see it, at least some of the industry’s execs will find themselves in similar positions. “Shareholder activism is on the rise,” the analysts wrote in a recent report, saying they expect it to be one of the key factors affecting M&A this year.
Even execs who aren’t in the middle of a trench war–the way Pyott was–will have to devote more of their time to shoring up their defenses, report author Jeff Greene told FiercePharma in January. “You’ll see boards and senior management teams giving analysts more respect and trying to get out in front of investors and preempt” the Ackmans out there, he said. “They’ll “take their own actions to maximize shareholder value before activists can get involved.”
By Carly Helfand  

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