More turnover is coming to Allergan’s board—and this time, it’s the man who arguably built the company.
Paul Bisaro, one-time CEO and chairman of the company and its leader through multiple iterations, is retiring as nonexecutive director. His departure will bring Allergan’s board roster down to 11 members and may please some investors eager for change at the top.
Bisaro, now chief executive at generics-maker Impax, has been shaping the company currently known as Allergan for more than a decade, starting out in 2007 as CEO of Watson Pharmaceuticals. Phase one of that process involved bulking up in the generics department with Watson’s Actavis buy, and after the company’s rebrand as Actavis, its purchase of Warner Chilcott.
For a follow-up act, Actavis diversified into branded drugs with its Forest Labs buyout and, later, its white-knight stealing of Allergan from hostile suitor Valeant.
Actavis took on the Allergan name after that transaction closed, and current Allergan CEO Brent Saunders took the helm, with Bisaro sliding into the executive chairman’s spot. It was from that position that Bisaro helped complete the drugmaker’s journey to brands from generics with a $40.5 billion sale of Allergan’s generics unit to Teva.
"Paul Bisaro is a transformational leader who created the building blocks necessary to bring this company from a midsized U.S. generics company to a global branded pharmaceutical leader,” Saunders said in a Wednesday statement, adding that he “will miss” the former skipper.
While exiting a generics industry that’s been ravaged by pricing pressure was heralded as the right move for Allergan, the company faces its own struggles—including restless shareholders clamoring for change. Generic threats to key products Botox and Restasis and an ill-fated and controversial attempt to protect Restasis’ intellectual property have both contributed to stock-price woes that a cost-cutting drive and promises of asset sales haven’t remedied so far.
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Against that backdrop, rebel investors at Senator Investment Group and Appaloosa earlier this summer called for Allergan to split its CEO and chairman’s jobs—the latter of which went to Saunders after Bisaro left for Impax, post-Teva sale—and replace at least two directors.
And the Dublin drugmaker has responded, at least in the board replacement department. Just days after the activist plea, it said director Patrick O’Sullivan would retire and appointed Thomas Freyman, an Abbott Labs vet, to take his place. More recently, the company said it would replace retiring Fred Weiss with neurobiology expert Michael Greenberg.
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Now, with Bisaro leaving, the average tenure among Allergan’s 11 directors—10 of whom are independent—will measure less than five years, thanks to a “refreshment process” that’s brought “a balanced mix of relevant backgrounds and fresh perspectives,” Allergan said
But as the company’s execs—as well as some analysts—have made clear, they never agreed with shareholders on the need for major changes in the first place. “I believe that Allergan continues to be well positioned to create long-term shareholder value,” Bisaro said in a statement.