Allergan board rejects Valeant bid

June 16, 2014

Allergan’s board of directors has unanimously rejected a May 30 bid of $54 billion from Valeant Pharmaceuticals International and Pershing Square Capital Management. Valeant and Pershing originally made an unsolicited $47 billion offer in April, which Allergan also rebuffed.

Irvine, Calif. - Allergan’s board of directors has unanimously rejected a May 30 bid of $54 billion from Valeant Pharmaceuticals International and Pershing Square Capital Management. Valeant and Pershing originally made an unsolicited $47 billion offer in April, which Allergan also rebuffed.

“Valeant’s revised proposal substantially undervalues Allergan, creates significant risks and uncertainties for Allergan’s stockholders and does not reflect the company’s financial strength, future revenue and earnings growth or industry-leading R&D,” said David E.I. Pyott, Allergan’s chairman of the board and chief executive officer.

Dermatologists value support

What dermatologists seem to value is the level of support Allergan has provided to the specialty over the years. In recent weeks, Allergan has received more than 600 letters from physicians and medical societies, expressing concern about Allergan’s tradition of innovation, physician education and consumer advertising if the takeover were to happen, said Philippe Schaison, Allergan’s corporate vice president and president, U.S. Medical.

One of the letter-writers, Vivian Bucay, M.D., a dermatologist in San Antonio, tells Dermatology Times, “Valeant has said publicly that investing in R&D (to the level that Allergan does) is not worthwhile.” However, she says, “Not everything is going to be a home run. What doesn’t work is just as important as what does work. Innovation does not happen every day. But commitment to innovation should happen every day.”

Susan Weinkle, M.D., who also wrote a letter in support of Allergan, says that with 30 years’ experience as a dermatologist, when it comes to innovation, “I have known the times of drought.”

Such a dry spell occurred between the development of collagen in the early 1980s and the arrival of hyaluronic acid (HA) in 2004, says Dr. Weinkle, who is based in Bradenton, Fla. Working with Allergan over the past decade, she says, “I have seen what a company’s commitment can mean” to moving aesthetic medicine forward. “For me, it’s very important to have a company that has a commitment to innovation in our field. I don’t ever want to go back to those dry times again.”

Dr. Bucay adds, “One of the things Allergan has done so well is research and development.” She fears this would disappear with a Valeant takeover, “because I’m seeing that happening with every acquisition Valeant makes.” After Valeant acquired Restylane (HA), Perlane (HA) and Dysport (abobotulinumtoxinA, Medicis), she says, “There were no more CME activities for training other physicians. And no other uses or indications were explored.”

Whether or not her letter has any effect on the ultimate outcome of the takeover attempt, Dr. Bucay says, “I wanted Allergan to know that I appreciate the company’s support of dermatology. Allergan has played a large part in my aesthetic career because they put aesthetics on the map.”

Next: Expanding innovation

 

 

Eyeing innovation

In this regard, Mr. Schaison says, “Allergan is spending roughly $1 billion a year on innovation - to bring new products or for new indications and line extensions. Just in 2013 alone, we secured more than 180 product and indication approvals worldwide. So, we are very robustly investing in R&D at a level that enhances patient care and creates opportunity for everyone.”

Fruits of Allergan’s R&D commitment include Juvéderm Voluma (HA), a new facial filler that received Food and Drug Administration approval in October 2013.

“It’s disruptive as it is the first and only filler approved to temporarily correct age-related volume loss in the cheek area in adults. Allergan has spent significant funds to advertise it directly to consumers,” Mr. Schaison says.

In the pipeline, he adds, Allergan hopes to bring Volbella and Volift (both HA), which are already available in other markets, to the United States in the future. Both products use the Vycross technology that makes the Juvéderm Voluma family unique. Further down the road, he said, Allergan - as a result of a license agreement with Medytox - is working to commercialize certain neurotoxin product candidates currently in development, including a potential liquid-injectable product.

Allergan learned June 4 that three of its products are under consideration for 2014 Prix Galien awards for pharmaceutical industry innovation.

“We’re the only pharmaceutical company with three nominations, and we are very proud of this accomplishment,” Mr. Schaison says.

Education and training

Along with R&D, Dr. Weinkle says, “I believe that patient support and education and physician education and training are all very important for treating my patients, and for patient safety.”

Mr. Schaison says that as a standalone company, “We’re spending more than $32 million for physician training in 2014. And more than 12,000 physicians have participated in Allergan Medical training programs since 2013.”

One of the most valuable training opportunities for Dr. Bucay has been learning how to analyze faces and plan aesthetic treatments from Mauricio DeMaio, M.D., a plastic surgeon in São Paulo, Brazil. Allergan provided this February session in Dallas, which included six dermatologists, at no charge, she says.

“It taught me new ways to look at faces, and the role that structural support can play in muscle function, for example. I believe it’s made me a better injector,” Dr. Bucay says.

Regardless of industry changes, she added, Allergan has continued to provide education.

“The company doesn’t believe training ever stops. Even those of us who are expert injectors still have opportunities to become even better-versed in what we do,” she says.

Additionally, Dr. Bucay says, “Our interactions with Allergan have increased our interactions with colleagues that we might otherwise not get to meet.” In this regard, she says, feedback from colleagues to Lynn Salo, Allergan’s vice president of sales and marketing, facial aesthetics, led to the creation of the Allergan-sponsored Women’s Dermatology Forum, which will hold its second annual meeting June 27-28.

Since the first such meeting in 2013, “We’ve all stayed in touch,” Dr. Bucay says. “Now we have each other as resources for practice management or clinical tips.” The group maintains an email list for questions on topics ranging from exam-room lighting to how to fire a patient, she says.

As for patient outreach, Mr. Schaison says, “This year, we have already invested more than $100 million in DTC programs, and we have committed more than half a million dollars in support of patient advocacy groups. We also have provided more than $100 million worth of product and services since 2013 via our patient assistance programs.”

As important as Allergan’s products are its people, Dr. Weinkle says. “Allergan as a company has a breadth of employees who have a long track record of time and experience in the aesthetic space.” The value of this experience is that “they listen to the needs of organizations that I’m involved with, and the needs of patients.”

Dr. Weinkle did not mean to imply that other companies don’t support dermatology as well, she says.

“But the research and development portion of Allergan has been a serious commitment. That’s what I don’t ever want to lose. That’s what takes our specialty and what we have to offer for patient care to another level. Without R&D, we’re stagnant,” she says.

As for the Valeant-Pershing bid, said Mr. Pyott in the press release, “The investment community has recognized the revised long-term growth outlook Allergan provided on May 12, 2014, and appropriately raised valuations for a standalone Allergan. We do not believe Valeant’s proposal reflects Allergan’s growth prospects, nor does it offer sufficient or certain value to warrant discussions between Allergan and Valeant.”

Disclosures: Dr. Bucay has been a consultant for Allergan, Medicis/Valeant and Merz but owns no stock in these companies. Dr. Weinkle has been an advisory board member for Allergan and Valeant and a clinical researcher for Allergan.