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R&D staff cuts likely as Allergan fights Valeant hostile takeover
As Allergan attempts to evade a hostile takeover attempt value at $53 billion from Canadian company Valeant, Fierce Biotech reports that its R&D division is likely to be hard hit. This is despite optimism at the beginning of the year from CEO David Pyott that the R&D wing would be further enhanced in the company. The newly announced Allergan plans include letting 1500 workers go and removing 250 vacant positions. In this way Allergan claims it can reduce its 2015 budget by $475 million. While all elements of the company would be affected by such major cost-cutting, including commercial, general, administrative and manufacturing staff, R&D is likely to be particularly impacted. Emphasis would be in maintenance of ‘customer-facing’ staff and protection of current key development programmes rather than in new discoveries.

Valeant has a reputation for taking over drug companies, as with Medicis in 2012, and then laying off R&D staff and severely cutting ongoing development projects. While Valeant attempts to raise the resources for a 25% stake in Allergan, David Pyott has been emphasising that Allergan are themselves looking to make new acquisitions, indicating that they would be most interested in companies with a profile that is “specialist in nature" and a with new therapeutic "pillar" that could be used in new product development. However, Allergan has suffered the loss of one of its major investors, Capital Research & Management, and has also faced the blow of a third time rejection of its migraine drug Semprana by the US Food and Drug Administration (FDA).

The announced proposed cutbacks from Allergan may make the acquisition more difficult for Valeant to effect. Sterne Agee analyst Shibani Malhotra noted: “Today's announcement by Allergan makes it more difficult for Valeant to demonstrate how a merger can add incremental value and AGN shareholders may now require Valeant to pay a greater premium for Allergan, we believe."


Fierce Biotech: [Accessed 22 July 2014]

Fierce Biotech: [Accessed 22 July 2014]
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