|Valeant CEO J. Michael Pearson|
Valeant ($VRX) wants to buy Allergan ($AGN), and a takeover orchestrated by the Canadian company's CEO, J. Michael Pearson, usually involves some hefty job-chopping. But sales reps need not worry about major layoffs, according to the helmsman. During an investor conference on the potential deal, he suggested that Valeant will need those reps to attain his target of $2.7 billion in synergies if the deal goes through.
According to The Wall Street Journal's MoneyBeat, whose David Benoit live-blogged the conference, that tally breaks down into $1.8 billion in cost savings and $900 million in revenue, Valeant CFO Howard Schiller said Tuesday.
Pearson thinks Valeant's sales force could do a lot on the revenue side with products like Allergan's Botox, one of the most recognized drug brands in the world--and one Valeant was actually marketing in Poland when he joined the company back in 2008.
But Valeant's sales force can't do it all on its own. On the contrary, Pearson says, Allergan's reps will contribute to that push for additional sales. Pearson told the conference in New York he was "sure a fair amount of the Allergan sales force around the world will be part of the new company."
After all, Valeant's reps will be busy in the coming months. Thanks to a string of recent deals, including buyouts of companies like Medicis, Obagi Medical and, most recently, eye-care giant Bausch + Lomb, Pearson's company has 19 upcoming U.S. launches on its hands, EVP Ari Kellen noted.
In fact, Valeant's force has already seen some rapid expansion. Its aesthetics sales team in the U.S. now boasts 340 reps, up from 49 in 2012; 150 reps are hawking the company's dental products, up from 100 a year ago, Schiller said.
That's good news for Allergan's marketers, whose company's board may have little say in the $45 billion deal Valeant and activist investor partner Bill Ackman proposed Tuesday. The California company has adopted a poison pill plan, partly to keep Ackman's Pershing Square from boosting its 9.7% stake much further, but it may not have much effect if investors like what Pearson has to offer.
In that event, if Allergan's sales-and-marketing team is more or less safe, who exactly will be facing Pearson's ax when it comes time to round up that extra $1.8 billion?
"When we went through and analyzed the cuts, these are not people touching the customers," Pearson said, as quoted by MoneyBeat. "These are people sitting in offices. We don't need people sitting in offices."
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Editor's note: This story has been updated with news of Allergan's poison pill plan.