|Allergan's Irvine, CA, headquarters|
Allergan ($AGN) is keeping the M&A plates spinning amid Big Pharma's big embrace of megadeals, reportedly reaching out to potential suitors Sanofi ($SNY) and Johnson & Johnson ($JNJ) while gearing up to make another go at acquiring Shire ($SHPG).
The California Botox maker is staring down an unsolicited offer of $46 billion from the buyout artists at Valeant Pharmaceuticals ($VRX) and storied activist investor Bill Ackman, last week downing a poison pill and threatening to dilute its shares if Ackman dials up his nearly 10% stake in the company.
But analysts have said Allergan's best bets for rebuffing the R&D-averse Valeant are finding a higher bidder or buying up a rival to make itself unattainable. And now, according to Bloomberg and Reuters, the company is doing both.
Bloomberg reports that Allergan has contacted Sanofi and J&J to see if either is inclined to make a bid, and the news service's sources said the two are considering their options in early-stage discussions.
Separately, Allergan is planning to re-proposition Shire after an earlier buyout effort fell on deaf ears, according to Reuters. The company made an initial pitch a few months ago but never made it into serious negotiations. Shire, which commands a market cap of roughly $31 billion, is made all the more valuable by its Irish nationality, presenting the alluring potential for tax savings through an en vogue process known as inversion. Allergan CEO David Pyott told FierceBiotech earlier this year that he has $10 billion earmarked for M&A, and while that wouldn't cover Shire's price tag, it could go a long way in beefing up his company's pipeline.
However, despite Shire's desirability, investors seem to prefer Allergan's chances of finding a white-knight acquirer, as the Irish company's shares tumbled more than 5% on the Sanofi and J&J news.
The latest market chatter comes amid a glut of Big Pharma deals, both rumored and real, that could alter the industry landscape. It began when GlaxoSmithKline ($GSK), Novartis ($NVS) and Eli Lilly ($LLY) shuffled business units in a multibillion-dollar three-team trade and buoyed on with Pfizer's ($PFE) now-public ambition to absorb AstraZeneca ($AZN) for about $100 billion.