Sector News

Why call us Allergan? Because brands are the name of Actavis’ new game

February 18, 2015
Life sciences
Actavis has been working to boost its branded drug sales and shift its identity from a generics maker to a company that houses both branded and copycat meds under one roof. In case there’s any confusion about the path it’s chosen, it’s taking on the name of its latest branded buy.
That’s right: Actavis will become Allergan once its deal for the Botox maker closes, pending shareholder approval, of course.
It’s a move that will highlight the “innovation in branded pharmaceuticals” that the Allergan name has represented for more than 65 years, CEO Brent Saunders said in a statement, rather than Actavis’ generic roots.
“We are convinced that the Allergan name will provide an umbrella of exceptional brand equity for an expanded and even more relevant global brand pharmaceutical portfolio. And it will communicate unequivocally what we stand for in the brand pharmaceutical space,” he said.
It’s no wonder the company wants the public to focus on its branded sales, which nearly tripled to $1.83 billion in North America in the fourth quarter. That’s 45% of its total top-line haul. And that performance helped it trump analysts’ profit estimates, with Actavis posting EPS of $3.91 to their expected $3.67. It also fueled full-year earnings projections of $16.30 to $17.30, the company said.
That doesn’t mean the Actavis brand is going away altogether. The company will keep the moniker for some geographic areas and product portfolios, and its shares will continue to trade under the symbol ACT.
“Uniting under the Allergan corporate umbrella, while retaining the Allergan and Actavis identities for the two respective businesses … will reflect our position as the most dynamic growth pharmaceutical company in global healthcare,” Saunders said.
But with generic drug sales expanding just 1% to $1.78 billion last quarter, that field is not what the company’s counting on to prove its worth as a “growth pharma” company. When announcing Actavis’ $66 billion agreement for Allergan back in November, Saunders cited doubled 2015 revenues in the combined company’s branded drug business.
The Dublin drugmaker will need both businesses firing on all cylinders if it wants to hit its overall revenue growth goals, which Saunders has pegged at at least 8% a year. That’s a far cry from the type of numbers Big Pharma has put up lately, which have maxed out at a few percentage points of growth a year.
But while Actavis may have the size to rank among pharma’s biggest, it’s adamant about resisting traditional Big Pharma company culture. Instead, it’s doing what it can to create a “nimble, fast-paced environment,” including keeping a flat structure, fostering individual accountability, and making sure news–both good and bad–travels quickly, he told FiercePharma last month.
By Carly Helfand

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