UPDATED: Has Allergan failure weakened Valeant CEO's M&A hand?

Valeant ($VRX) CEO J. Michael Pearson upheld his reputation as a disciplined bidder when he refused to top Actavis' ($ACT) $66 billion bid for Allergan ($AGN). But now that his company has nothing to show for the past 7 months, has its dealmaking reputation taken a hit?

The Allergan ordeal was certainly a public setback for a company that needs to seal some deals--and quickly--if it hopes to meet its stated goals of joining the ranks of the world's top 5 drugmakers by 2016. And Allergan's refusal to come to the bargaining table may inspire pushback from future targets, Gluskin Sheff + Associates portfolio manager Peter Mann told Reuters.

CEO David Pyott "and his team at Allergan have proven that there are other avenues," he said.

But while losing Allergan may sting for now, in the long run the advantages of Valeant's acquisition-based business model should win out, Gautam Dhingra, CEO of Valeant shareholder High Pointe Capital Management, told the news service.

One thing seems almost certain: Deal-focused Valeant will get back in the M&A saddle before too long. Pearson has said before that he's active in any number of buyout talks at any given time, Reuters notes. And the Canadian pharma probably feels some pressure to show it's still got it, Dhingra pointed out.

Bill Ackman

Valeant may have already started laying the groundwork for those plans: Its Allergan deal partner, activist investor Bill Ackman, last week acquired a roughly 8.5% stake in animal health leader Zoetis ($ZTS). Pearson has said before that animal health is an area he has his eye on, and rumor has it he was lining up the Pfizer ($PFE) spinoff as an Allergan fallback plan.

But on the other hand, Zoetis has already adopted a poison pill defense, and it's unlikely the company will try to force another hostile transaction anytime soon, Glenn Greenberg, managing director of Valeant shareholder Brave Warrior Advisors, told Reuters.

It's "no fun having the company you built impugned and trashed," he said.

Instead, Valeant could look elsewhere for an entrance into the animal health arena. Instead of the highly valued Zoetis, Valeant could go after Merck's ($MRK) animal health division--which CEO Ken Frazier has said the company intends to keep--or Boehringer Ingelheim's Vetmedica, Morningstar analyst David Krempa told Reuters.

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Editor's note: This story has been updated to reflect Frazier's comments on the Merck's animal health unit from the company's Q3 conference call.