Sector News

This Giant Drug Firm Won’t Invent Medicines. Investors Are Cheering.

January 21, 2015
Life sciences
In early January Brenton “Brent” Saunders, the chief executive of upstart pharmaceutical giant Actavis , reclined in a medical chair on a stage in an Orlando hotel ballroom as a plastic surgeon pierced his face 30 times, delivering needles full of Botox to the crooks of his eyes and nose and injecting Juvederm Voluma, a dermal filler, into his cheeks. A cameraman documented every prick and projected it on a huge screen behind him. These are bestselling products for Allergan AGN +0.72%, which Actavis is buying for $67 billion, the biggest health care deal in six years. The audience, 1,000 Allergan sales reps, went wild.
“I don’t have any crow’s feet anymore, and I don’t have any wrinkle lines above my nose,” says Saunders, who was boyish-looking even before his face was shot up with treatments. “Now I can say I’m not just the CEO, I’m a user.”
He’s also, at just 44, the hottest executive in the global pharmaceutical business and, at least for now, the undisputed deal king of Wall Street. Five years ago Saunders had never been a CEO. Now he has run three major drug companies and sold two, generating $25 billion for his public shareholders and investors such as private equity firm Warburg Pincus. In the last year alone he did deals worth $97 billion. Actavis, a generic-drug maker, was the white knight that saved Allergan from a bitter hostile takeover attempt by rival pharmaceutical company Valeant and activist investor William Ackman. The combined Actavis-Allergan will be the world’s tenth-biggest drug firm, with 30,000 employees and, despite being unprofitable, $8 billion in free cash flow on revenues of $23 billion.
“I interview a lot of people for top jobs,” says Carl Icahn, who backed Saunders for the CEO slot at Forest Labs, which he ran for five months in 2013, and who once promised to bankroll him with $2 billion for a proposed startup. “When I met him, in my mind, he stood out right at the top.” Ackman agrees with Icahn (incredibly, given their bitter history). He calls Saunders “capable and smart.”
> Read the full article on the Forbes website
By Matthew Herper
Source: Forbes

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