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Valeant files complaints against Allergan

Rochester Business Journal
July 21, 2014

Valeant Pharmaceuticals International Inc. has lodged complaints with U.S. and Canadian regulators to take Allergan Inc. to task for claiming Valeant vastly is overstating Bausch & Lomb’s sales performance, Valeant officials said Monday.

The complaints, lodged with the Securities and Exchange Commission and the Autorite des marches financiers in Quebec, come as the latest salvo in Valeant’s attempted hostile takeover of a reluctant Allergan, the company known best for its commercialization of Botox as a cosmetic.  

A statement Allergan filed with the SEC on Friday claiming Bausch & Lomb’s pharmaceutical sales stagnated and declined in the 11 months since Valeant acquired the eye-care company is false, Valeant chairman and CEO Michael Pearson said.

“We can no longer tolerate unjustified attacks on Valeant's business and strongly believe we are obligated to take action to protect Valeant shareholders from Allergan's apparent attempts to mislead investors and manipulate the market for Valeant stock. Allergan's continued disparagement of Valeant and repeated questioning of Bausch & Lomb's performance demonstrate their fundamental lack of knowledge about Valeant's business,” Pearson said.

“(Bausch & Lomb) has performed extremely well, delivering total organic growth of 11 percent since the acquisition, with over 90 percent of that growth attributable to volume pharmaceutical sales,” Pearson said.

In an SEC filing Monday, Allergan repeated statements it made to its shareholders on June 23 urging them to reject Valeant’s unsolicited tender offer of that same day—$72 in cash plus .83 share of Valeant for each Allergan share. 

“After careful consideration, in consultation with financial and legal advisors (Allergan directors) unanimously concluded that the offer is grossly inadequate, substantially undervalues Allergan, creates significant risks and uncertainties for Allergan stockholders, and is not in the best interests of Allergan and its stockholders,” Allergan’s July 21 filing states.

Valeant’s takeover bid is set to expire in mid-August but Valeant has said it would renew it if no action is taken by then.

Pearson responded this week to Allergan’s June statement with an attempt to foment discord among Allergan shareholders.

The Botox maker’s shareholders should amend Allergan’s bylaws, cashier six directors “and propose the appointment of new directors, who will thoroughly evaluate Valeant's offer, which represents a strategically compelling and enormously value-creating opportunity for Allergan stockholders,” the Valeant CEO said Monday in a statement.

In a July 18 presentation to its investors, Valeant cited preliminary estimates of Bausch & Lomb’s second-quarter performance, claiming 14 percent overall organic growth in U.S. sales, 17 percent growth in U.S pharmaceuticals, 38 percent organic growth in U.S. contact lens sales and 12 percent growth in U.S. consumer product sales.

Valeant forecasts the eye-care company’s second-quarter sales in other developed markets will see 8 percent growth and that it will see 14 percent sales growth in emerging markets with 90 percent or more of the upswing coming from organic growth.  

On Monday, Valeant shares (NYSE: VRX) were trading at $124.53, up $2.56 or 2 percent.
    
(c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail service@rbj.net.
 



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