BLOG: Closing the book on Allergan, Valeant

ByDarrell E. White, MD

Because I spent a considerable amount of time and electrons sharing my dissatisfaction with the conduct of the players in the Allergan-Valeant saga (it was my opinion that both sides neglected their constituents, us, while distracted by the takeover battle), it seems only fair that I congratulate both Allergan and Valeant on how they are moving on from the conclusion.

Let me begin with Valeant. A nimble company designed to take advantage of market weaknesses and characterized by classic McKinsey-type financial management, Valeant has pivoted quickly away from the takeover battle and moved on. We can assume that management will make more moves in the diagnostic arena, and frankly I’m happy to see that. There are some really cool things out there in both the medical and surgical side of the game, many of which could use the marketing savvy and financial acumen of Valeant’s executive team. Here’s hoping I’m right.

Allergan was “victorious” in the battle insofar as its management was able to maintain a modicum of control over the type of company it would remain by joining forces with Actavis. In a related “good news” item, this new corporate union brings Brent Saunders back into the ophthalmic sphere, which I think is good for all of us and our patients. To be sure, Saunders and his team are also accomplished financial mavens (he sold Bausch + Lomb to Valeant on behalf of another VC group, after all), and there will be “consolidation” savings in R&D in the takeover here. The difference is that they are 48% of what Valeant had planned in real dollars, and only 18% of the combined R&D budget of the new, larger company, compared with a reported 69% of a combined Allergan-B+L. We, physicians and patients, continue to have one large company with classic in-house R&D working in our space, and for this I am grateful.

Having said all of this, a pox on those who create wealth without creating value, who seek not the creation of value but only the creation of wealth. It remains to be seen whether the management at Valeant has a sense of the difference; decades-old personal relationships between B+L and long-term customers are now characterized by “dead air” rather than the highly interactive buzz at all levels of the B+L org chart many of us enjoyed for years. A highly engaged customer base awaits, anxious to learn which culture will emerge.

Disclosure: White reports he is a consultant for Bausch + Lomb, Allergan, Nicox, Shire and Eyemaginations and on the speakers board for Bausch + Lomb and Allergan.