If Allergan has a pickup to make, make it now, shareholders say

Allergan CEO David Pyott

Allergan ($AGN) has said it's working on some plans of its own to give investors "most of what they want" instead of the $53 billion hostile bid that Valeant ($VRX) and lead Allergan shareholder Pershing Square have put before them. And if those plans include a pickup of its own, it better get to it, shareholders say.

As CEO David Pyott told the Financial Times, he recognizes that the California company--which has $14 billion of cash on its balance sheet--should act now on a deal if it's going to act at all. "Our stockholders have been fairly clear that if we have a deal that we can do, we should do it soon," he said.

Analysts have speculated that Allergan could make a buy of its own in order to thwart Valeant's plans; a non-U.S. acquisition, in particular, could help the company snag the low tax rate that Valeant CEO J. Michael Pearson has promised as part of a potential merger. The latest rumors have centered on Ireland-based Shire ($SHPG), a company Allergan has reportedly targeted in the past.

But whether Allergan will use its extra cash to go after Shire remains to be seen. As Deutsche Bank analyst Mark Clark told Bloomberg last month, a deal between the two wouldn't necessarily make much sense outside of providing Allergan with a way to dodge its predator.

The only potential area of overlap between the two is in eye diseases, with Shire recently announcing plans to apply for FDA approval of its dry eye treatment. And if that candidate doesn't make it to market, "there is next-to-zero industrial logic in Allergan acquiring Shire, as they operate in very different fields," he told the news service.

Shire is also already embroiled in a takeover saga with AbbVie ($ABBV), which this week made its fourth bid for the rare-disease and ADHD drugmaker.

But whether or not a buyout is on Allergan's radar, the company is lining up plans to cut costs and overhaul management incentives, Bloomberg reported Wednesday. Allergan will unveil the restructuring blueprints during its earning announcement later this month.

In the meantime, Pyott did disclose to the FT that the R&D-focused company will freeze some early stage development programs, though Allergan--which has trumpeted its R&D success and criticized Valeant's business model, which all but cuts drug development out entirely--may be doing so begrudgingly.

"It's a challenge for our industry, but there is a mismatch between the life cycle of a chief executive and the life cycle of drug development," Pyott told the Times.

- read the FT story (sub. req.)

Special Reports: Pharma's top 10 M&A deals of 2013 - Valeant/Bausch + Lomb | The most influential people in biopharma today - J. Michael Pearson - Valeant | 20 Highest-Paid Biopharma CEOs of 2012 - David Pyott - Allergan

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