Allergan CEO preps multibillion-dollar deal spree to swell pipeline
|Allergan CEO David Pyott|
SAN FRANCISCO--Over the course of last year Allergan joined the blockbuster R&D club in biotech, boosting research spending by about $85 million to $1 billion. Over the same period its research staff swelled by about 500, to approximately 2,500. This year Allergan ($AGN) CEO David Pyott says that the company will add hundreds more investigators as it looks to boost its total research allocation to $1.5 billion over the next 5 years. And a confident Pyott tells FierceBiotech that he's ready and willing to spend billions more to cover the cost of new acquisitions and pacts aimed at expanding the company's core research focuses--while pondering the addition of a new drug category to the list of 5 core focuses if the opportunity looks right.
Pyott came to the JPMorgan conference in San Francisco eager to discuss the company's growth, and not just sales growth. The CEO already considers Allergan a leader in ophthalmics and medical aesthetics--a field that includes its iconic wrinkle remover Botox.
"We can afford to pay more than anyone else," Pyott says, when it comes to adding new programs to the company's top fields. And that reputation has earned Allergan a first look at just about everything on the market. But the company has been carving out new fields in medical dermatology, neurology and urologics, all areas where Allergan is ready and willing to go out and take the extra steps needed to hunt down new programs of interest, whether it's through a buyout, a licensing deal or partnership.
Allergan is in a position to spend up to $10 billion in cash for new deals, Pyott says, adding that he's perfectly at ease leveraging the company's reserves to go after new products.
Allergan has done a number of deals in the past few years, from a $275 million deal in 2011 to buy Vicept and an experimental rosacea therapy to a $65 million upfront to license in next-gen botulinum toxin candidates at South Korea's Medytox last fall. Pyott says you can expect a broad array of big as well as small deals, adding that with some near-term approvals likely, he's willing to take on some increased risk in terms of the experimental products he wants to add.
The bulk of Allergan's R&D operations are in Irvine, CA, where the company is based. But the company has been adding staffers in Bridgewater, NJ. And while the company has been buying up new therapies, 2013 was not a smooth ride. In particular Allergan's announcement that two top late-stage programs--Darpin for macular degeneration (a potential rival to Regeneron's Eylea as well as Lucentis) and the hair-loss program for bimatoprost--were being delayed by a year or two as researchers felt the need to add to new mid-stage studies before jumping into Phase III.
Pyott shrugs off the hubbub that surrounded last year's decision to delay two key late-stage programs, which a number of analysts and investors didn't care for.
"I regard it as hype," he says. In the general scheme of things, if they're pushed back 18 months or so, "is it that big a deal? I don't get it."
Pyott views Allergan as a Big Biotech able to move fast to grow the company. Over the next few years, he plans to demonstrate just how fast.
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