Valeant's CEO, a crackerjack cost-cutter, seeks more 'fat' companies to buy

Valeant CEO J. Michael Pearson

Back in January, Valeant Pharmaceuticals' CEO J. Michael Pearson couldn't say how he intended to reach his lofty goal of cracking the list of top 5 drugmakers worldwide. Now, he's offering new details about his acquisition blueprints, and they include deals in ophthalmology, dermatology and dentistry.

As Bloomberg reports, Valeant ($VRX) is scouting for pickups in the three specialty fields, all of which "are growing faster than the overall growth rate of health care," Pearson told the news service Wednesday. Those targets fit right in line with Pearson's MO, which involves homing in on companies in high-growth areas--both geographic and therapeutic--and gobbling up as many as possible, as quickly as possible.

The Canadian drugmaker has already made significant inroads in those fast-growing fields since Pearson overhauled the company's strategy 6 years ago. Valeant nabbed dental care company OraPharma for $312 million in 2012, and it has bought several dermatology companies, including Medicis in 2012 and Obagi Medical in 2013. Most recently, it padded its buyout tally with a $250 million bid for Solta Medical, a maker of dermatological treatment devices.

Eye care, too, has been a cornerstone of Valeant's M&A plans since the company acquired its eye-drug business in a 2010 buyout of Aton. Eyetech and Bausch + Lomb--Valeant's largest-ever deal at $8.7 billion--rank among Pearson's recent ophthalmology conquests.

As Pearson told Bloomberg, he's trying for another Bausch + Lomb-sized deal for 2014, in particular eyeing those companies with problems Valeant can fix. "We like companies that are fat, lots of costs that we can take out," he told the news service. Analysts have speculated that Teva ($TEVA) could be on his radar; the Israeli generics maker is currently foundering amid a $2 billion savings drive, and its 5,000 announced layoffs in 2013 ranked it third on FiercePharma's annual list of pharma job-choppers--one place above Valeant.

But Pearson's company still has a long way to go if it wants to join the ranks of Big Pharma's biggest companies by market cap. As Bloomberg notes, the Quebec-based company's shares have multiplied nearly tenfold since Pearson took the reins, bringing its market cap to just over $47 billion. But that's a far cry from the $134 billion market cap boasted by Sanofi ($SNY), which currently holds the No. 5 spot.

- see the Bloomberg story
- and get more from the news service

Special Reports: The most influential people in biopharma today - J. Michael Pearson - Valeant | The top 10 largest pharma layoffs in 2013 - Valeant - Teva

Suggested Articles

Turns out Procter & Gamble didn’t want Pfizer’s consumer health unit after all. But it did want Merck KGaA’s.

Private equity firm, in exclusive talks with Sanofi, says it'll invest to pump up Zentiva into an "independent European generics leader."

With suitor Takeda circling Shire, the Dublin-based target has pulled off a deal of its own.