Another day, another deal for Valeant's Pearson

Valeant Pharmaceuticals ($VRX) made the M&A news again today: This time, the Canadian drugmaker scored some assets from Atlantis Pharma, a Mexican branded-generics company, for $71 million. The small deal, which gives Valeant a boost in the Mexican market, also adds one more piece to the puzzle CEO J. Michael Pearson is assembling, one deal at a time.

And as Pearson tells The Wall Street Journal in a Q&A, he sees deal opportunities in the drug business as "almost limitless" in the foreseeable future. "It's an extremely fragmented industry," he points out. "If you add pharmaceuticals--including over-the-counter drugs, the prescription drugs and the generic drugs--globally it's well north of a trillion dollars, and if you look at the largest companies, they are less than $100 billion."

The way Pearson sees it, bringing some of those fragments together is a play for efficiency. Because the small fish in the pharma pond have to field their own sales forces and set up their own manufacturing, in-house or otherwise, there's plenty of excess to be wrung out of the system.

Pearson has managed 6 small deals so far this year--7 if you count Atlantis--for a total of more than $500 million. Last year, he went after 13 companies and nabbed 11 of them, spending $2.78 billion in all. Along the way, he's built up Valeant's expertise in dermatology, neurology, branded generics and over-the-counter products. And he's taken Valeant deeper into emerging markets like Mexico and Eastern Europe.

Now, Pearson would like to shop in other emerging regions such as Southeast Asia, and to zero in on Latin American countries such as Colombia. But not China, despite its strong growth. "Part of our core strategy is actually to compete in areas that others aren't looking at," he tells the WSJ. "We'd rather ... be the big fish in a small pond as opposed to the small fish in a big pond."

- see the WSJ interview
- get more from Reuters