|Valeant CEO J. Michael Pearson|
Nouveau riche, nouveau influential
Name: J. Michael Pearson
Title: CEO, Valeant Pharmaceuticals
Love him or hate him, Valeant ($VRX) chief executive J. Michael Pearson's M&A strategy has helped the Canada-based drugmaker achieve exponential growth--and others in the industry have taken note.
The deal-happy CEO first met with the company's board as a consultant back in 2007, ultimately telling directors that their "current strategy is not only not working, it doesn't have much of a chance to be successful," according to The Globe and Mail. From there, the company took up Pearson's strategy--and it hasn't looked back since.
Pearson's way of doing things involves zeroing in on high-growth areas--both geographic and therapeutic--and making deals, and lots of them. Dermatology ranks high among those areas Pearson has targeted, with Valeant picking up skincare companies like Medicis in 2012 and Obagi Medical in 2013.
Eye care is another high priority for Pearson, and Valeant has been as active as anyone in the specialty field. Since acquiring its eye-drug business in a 2010 buyout of Aton, Valeant has nabbed companies like Eyetech and, more recently, Bausch + Lomb, completing its largest deal ever at $8.7 billion.
Whether Pearson's got some admirers out there or he just knows how to pick his spots, both fields have seen a recent flurry of dealmaking. And some analysts suspect the CEO has inspired at least a couple of Valeant's peers, notably Endo ($ENDP), whose helmsman Rajiv De Silva served as president of Valeant before joining the company last year. "De Silva is very well-informed by Valeant's playbook," Piper Jaffray analyst David Amsellem told Bloomberg in November.
There's certainly reason for other companies to want in on a piece of the revenue Pearson's methods have generated. As large as Valeant's appetite for acquisitions has been, Pearson's sales goals have been even bigger, and the company has gone from $3.4 billion in 2012 sales to 2014 guidance of $8.2 billion to $8.6 billion.
So when will the deal craze end? If Pearson has his way, his company will join the ranks of the top 5 drug companies by market cap before 2016 closes out, he announced last month. By his calculations, that means Valeant--with a current market cap of about $38.4 billion--has just under three years to reach about $150 billion.
"Unless you aim high, you don't achieve high," Pearson said on a conference call in January. "How we get there, we can't say at this time."
-- Carly Helfand (email | Twitter)
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