Activist investor Bill Ackman thinks an early-stage Berkshire Hathaway is out there--and he thinks it's Valeant Pharmaceuticals.
The Canadian pharma should be worth more than $330 a share, based on assumptions including $10 billion of acquisitions a year, he said Monday at the Sohn Investment Conference in New York, Bloomberg reports. The company's stock closed that day at $222.86.
It's far from the first time Ackman has praised Valeant ($VRX), his hedge fund's former partner in a months-long hostile pursuit of Allergan. Throughout the takeover battle, Ackman defended Valeant's merge-and-purge business model, and--after losing out on the target to white knight Actavis ($ACT)--he put his money where his mouth was, grabbing a $3.3 billion stake in the company.
Since ceding Allergan in November, Valeant has made a pair of other pickups, shelling out close to $16 billion for GI specialist Salix Pharmaceuticals and nabbing cancer vaccine Provenge and other assets for $400 million from bankrupt biotech Dendreon.
But the pickup-happy pharma still has "plenty of room" to keep the deal train chugging along, Ackman said.
So far, Valeant--which favors buying and cost-cutting to shelling out on risky R&D projects--has shown no signs of changing its MO, though it has gone out of its way to highlight organic growth in the wake of Allergan's attacks on its strategy. And it'll need to keep shopping if it wants to hit the lofty goal CEO J. Michael Pearson set early last year: Become one of the world's top 5 drugmakers by 2016.
Meanwhile, post-Allergan, Ackman is still making his presence felt around the pharma world. His fund, Pershing Square Capital Management, in February scored a seat on the board of animal health leader Zoetis ($ZTS), and this week the Pfizer ($PFE) spinoff pledged to cut $300 million in costs in response to investor pressure.
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Special Report: The most influential people in biopharma today - J. Michael Pearson, Valeant