Last week, vocal investors called for Allergan CEO and Chairman Brent Saunders to give up one of those titles, making room for an outsider at the top. But sources said the outsider some shareholders have in mind is actually a former insider.
Some of Allergan’s largest shareholders are talking amongst themselves about bringing retired Allergan CEO David Pyott back as chairman, Business Insider’s sources said, though it’s unclear whether they’ve formally contacted Pyott yet about the possibility.
An Allergan spokeswoman, for the company’s part, said in an emailed statement that “We don’t comment on market speculation or rumor.”
After building up Allergan into a major aesthetics and eye care player—and fending off a monthslong Valeant takeover—Pyott presided over its $66 billion sale to Actavis in 2015 and then left.
Industry watchers at one time thought he would join the board of the bulked-up drugmaker, which adopted the Allergan name but left in place Paul Bisaro as chairman and Saunders as CEO.
That never happened, though—perhaps because Pyott would have made a third nonindependent director for the company, perhaps because the $534 million in cash the former CEO walked away with upon retirement was too large a sum to ignore. Either way, without Pyott, Saunders and Bisaro went on to make a series of moves that left the company looking pretty different than it did when Pyott said goodbye.
For one, the pair integrated Allergan with CNS- and GI-focused Actavis, as expected. But it also hived off the Actavis generics business for $40.5 billion to Teva, just in time for Allergan to dodge the massive hit pricing pressure took on the entire copycat drug industry.
Another change? Allergan's shares have been bottom-feeding for months, thanks to competitive threats to lead sellers Botox and Restasis, plus a controversial deal with the St. Regis Mohawk Tribe that was meant to protect Restasis' IP.
That share weakness prompted a letter that activists at Senator Investment Group and Appaloosa last week sent to Allergan’s board, calling on the company to split the CEO and chairman jobs. They labeled Saunders’ recent attempt to turn sagging shares around—by announcing Allergan’s intent to divest its women’s health and anti-infectives businesses—“half-hearted” and requested turnover in two boardroom seats, too.