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Outlook for Allergan destined to change
Admit it. You went to ASCRS expecting to join your colleagues in the act of righteous indignation at the CMS data dump of physician Medicare income. I sure did. Boy, did THAT change fast when the news of Valeant and William Ackman teaming up to make a play for Allergan hit the front page of The Wall Street Journal on Tuesday before the meeting! I don’t know about you, but the only time the whole CMS nonsense came up was when another doc made the same observation that I just did.
What do you think? One of our biggest, most important pharmaceutical companies, at least as far as anterior segment surgeons and dry eye docs are concerned, is now “in play.” If history serves, and it always does, Allergan as we know it is going to change. Once a large company of any type is identified as undervalued by either a competitor or an “activist investor” like Ackman, the company almost never comes out the other side unchanged. The only example in recent memory of a company repulsing anything remotely like this was eBay turning away Carl Icahn’s attempt to force the sale/separation of PayPal from eBay proper. Odds are something is going to change for Allergan.
What this change will mean for us, docs on the front line using the products made by the eye care side of Allergan, remains to be seen. According to public statements, a Valeant purchase of Allergan would likely mean a drastic reduction of in-house R&D as well as lots and lots of jobs lost with all of the overlap between the two companies. The effect of the purchase of another company by Allergan in an effort to become too large to be acquired would have an equally dramatic effect on us, one that would depend on the company acquired and its stable of products and resources.
How should we react? What should rank-and-file ophthalmologists do? The reality is that only a handful of eye docs will be consulted (yours truly certainly NOT among them), and even they will have very little influence. It’s a numbers game now, and for the moment we are not in the equation. Pay attention, though, because we will likely have adjustments to make based on whatever the outcome is.
Disclosure: White is a consultant for Bausch + Lomb, Allergan, Nicox and Eyemaginations. He is on the speaker board for Bausch + Lomb, Allergan and TearLab.