Allergan CEO Brent Saunders, a 1988 Parkland High School graduate who grew up in South Whitehall Township, has a knack for orchestrating blockbuster deals in the pharmaceutical industry.
His biggest deal yet could be just days away.
Pfizer is in advanced talks to buy Allergan for as much as $380 per share, people familiar with the matter told Bloomberg, valuing the Botox-maker at as high as $150 billion — if the U.S. government doesn’t get in the way of the drug industry’s largest-ever deal.
The companies aim to announce an agreement as soon as Monday, the people said, asking not to be identified because the discussions are private. The price being discussed is $370 to $380 per share, two of the people said. However, the U.S. Treasury Department’s letter on tax inversion deals, released on Wednesday, could delay the final agreement and change the terms of any transaction, another person said.
The companies were moving toward a plan to make Saunders CEO of the combined firm, people with knowledge of the matter told Bloomberg on Nov. 11.
In a Sept. 8 interview with The Morning Call, Saunders said he is trying to make Botox-maker Allergan the “best company in our industry.”
“My hope is that Allergan is the last business card I have, the last company that I work for on a full-time basis,” Saunders said Sept. 8. “But my hope is to be here about 15 years and try to retire when I get closer to 60.”
Over the last 5 1/2 years, Saunders has engineered several huge deals, totaling about $150 billion.
Allergan has acquired a number of companies as it expands its branded-drugs business after agreeing — less than four months ago — to sell its generics arm to Israeli rival Teva Pharmaceutical Industries Ltd. for about $40.5 billion. The company has topped earnings estimates for the past eight quarters, positioning it as an attractive addition to Pfizer’s portfolio.
Pfizer has been looking for its next big hit after patents expired for its cholesterol drug Lipitor and arthritis drug Celebrex. The company, which reported $49.6 billion in revenue last year, in September raised its profit forecast for 2015.
Pfizer shares sank 3 percent to $32.29 and Allergan fell 2.8 percent to $302.05 on Thursday on speculation that the deal could be hampered by the Treasury’s letter, which said the department is reviewing ways to address overseas acquisitions and plans to issue guidance later this week.
There have been a flurry of pharma and biotech mergers this year, already surpassing last year’s record of $220 billion in deals, according to data compiled by Bloomberg. Buying Allergan, which has its legal domicile in Dublin, could let New York-based Pfizer relocate outside the United States for tax purposes, a transaction known as an inversion.
“We struggle to see what the Treasury can do to specifically curb” a combination of the two companies, Citigroup Inc. analysts said in a note Wednesday. Still, the “political noise” that would surround Pfizer’s relocation “constitutes the most material hurdle to consummation of a transaction of this nature.”
Chances of the deal going through hinge more on “what price Allergan’s willing to take and also, we don’t know if there’s pressure from the White House in the background,” Umer Raffat, an analyst at Evercore ISI, said by phone. The Treasury Department doesn’t have power to block an inversion, but it could reduce the economic benefits of such a deal, he said.
A deal at $380 per share would be the largest acquisition this year in any industry and would surpass Pfizer’s $116 billion purchase of Warner-Lambert Co. in 2000 as the biggest- ever transaction between drug companies, the Bloomberg-compiled data show. Representatives for Allergan and Pfizer declined to comment.
Bloomberg and Morning Call reporter Jon Harris contributed to this report.
