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Nov. 23, 2015, 7:48 AM
- It's official. Pfizer (NYSE:PFE) and Allergan (NYSE:AGN) agree to merge in a $160B deal, the largest inversion transaction on record. AGN shareholders will receive 11.3 shares of the combined company for each AGN share while PFE shareholders will receive one share of the combined firm for each PFE share. The deal should close in H2 2016. After the merger, the company will do business as "Pfizer plc" and trade under the "PFE" symbol. It will be domiciled in Ireland (pro forma adjusted effective tax rate expected to be 17 - 18%).
- Pfizer shareholders will own ~56% of the combined firm while Allergan shareholders will own ~44%. Pfizer chief Ian Read will be Chairman & CEO while Allergan chief Brent Saunders will be President & COO.
- The merger should be neutral to Pfizer's non-GAAP EPS in 2017, accretive in 2018, more than 10% accretive in 2019 and accretive in the high teens in 2020. Operating cash flow should exceed $25B beginning in 2018.
- The company will make a decision on splitting its innovative and established businesses no later than the end of 2018.
- Separately, Pfizer will execute a $5B share repurchase program in H1 2016. It has ~$5.4B remaining on its previously announced buyback plan.
- Pfizer will host a conference call this morning at 8:30 am ET to discuss the transaction.
- Slide presentation
Nov. 22, 2015, 8:23 PM
- In what would be the largest "inversion" deal ever, the boards of Pfizer (NYSE:PFE) and Allergan (NYSE:AGN) have agreed to merge, reports the WSJ, with an official announcement perhaps coming tomorrow.
- The deal, of course, comes days after Treasury issued new rules aimed at curbing such deals, but analysts say the new measures don't put this particular merger at risk. Global antitrust regulators will be sure and have their say, though.
- Pfizer CEO Ian Read - an outspoken critic of high U.S. corporate tax rates - will lead the combined company, says the Journal, with Allergan CEO Brent Saunders serving as president and COO.
- The final terms would have Allergan shareholders receiving 11.3 Pfizer shares for each share of AGN they own, say sources, and there's also a small cash component. Pfizer closed Friday at $32.18, making just the stock portion worth $363.63 vs. Allergan's close of $312.84.
- The companies are planning for seven to nine months before closing. The combined entity is then expected to evaluate splitting into two businesses - one focused on patent-protected products and the other on drugs that have already lost it (or are close to).
- Previously: Pfizer said to be near deal to buy Allergan for as much as $380/share (Nov. 18)
- Previously: Will the new inversion rules derail a Pfizer-Allergan deal? (Nov. 20)
Nov. 20, 2015, 2:24 AM
- According to tax experts, it appears that the moves were modest and there was scarce evidence they would stop the world's largest inversion on record.
- There's also some creative thinking taking place. The two are discussing a deal that could have Allergan (NYSE:AGN) technically swallow its larger rival Pfizer (NYSE:PFE), in a tie-up that could be valued at upwards of $140B.
- Previously: U.S. introduces new rules against inversions (Nov. 20 2015)
- Previously: Pfizer and Allergan negotiating break-up fee as high as $4.5B, shrugging off regulatory risk of potential $150B deal (Nov. 19 2015)
Nov. 19, 2015, 11:14 AM
- According to informed sources, Pfizer (PFE -3.9%) and Allergan (AGN -2.6%) are negotiating a break-up fee of 2 - 3% of Pfizer's potential bid of $150B for the BOTOX maker. The upper range of the fee, $4.5B, sends a clear signal that Pfizer does not view the Treasury Department's upcoming anti-inversion regulations as an impediment to a deal.
- Previously: Pfizer said to be near deal to buy Allergan for as much as $380/share (Nov. 18)
- Previously: Treasury Department to announce new anti-inversion tax rules this week; potential acquisition target Allergan off 4% after hours (Nov. 18)
Nov. 18, 2015, 8:30 PM
- Pfizer (NYSE:PFE) is in advanced talks to buy Allergan (NYSE:AGN) for $370-380/share, according to multiple reports.
- The companies are aiming to announce an agreement as soon as Monday, but the U.S. Treasury Department’s letter on tax inversion deals could delay the final agreement and change the terms.
- A deal at $380/share would value AGN at nearly $150B and be the biggest health care deal ever, as well as the largest acquisition this year.
Nov. 18, 2015, 5:06 PM
- The U.S. Treasury Department will announce new tax rules this week to discourage, if not outright ban, tax inversion deals. In a letter to Congress, Treasury Secretary Jack Lew promises "targeted guidance."
- Ireland-domiciled Allergan (NYSE:AGN) is off 4% after hours on increased volume on the perception that potential suitor Pfizer (NYSE:PFE) may get cold feet for a deal if the tax advantages are taken away.
Nov. 16, 2015, 7:49 PM
- In its 13F filing, Soros Fund Management revealed it's bailed out on its Herbalife (NYSE:HLF) bet by liquidating a near 2M-share position in Q3 -- likely at a profit -- and added stakes in Netflix (NASDAQ:NFLX) and Wynn Resorts (NASDAQ:WYNN), as well as boosting Allergan (NYSE:AGN) as its top holding.
- Herbalife is up almost 47% YTD as Soros and Carl Icahn lined up on the long side against bearish investors including Bill Ackman. The Soros fund also reduced its put holdings on the S&P 500, to 836K shares from 2.9M.
- Behind the Allergan add, Soros disclosed a $137.5M investment in PayPal (NASDAQ:PYPL) and ended the quarter with a $32.8M investment in Netflix, as well as $9.9M in Wynn.
- Aside from Allergan, the Soros Fund's biggest holding was in Adecoagro (NYSE:AGRO).
- Overall market value of the Soros holdings dropped to $6.61B, from $10.75B.
Nov. 11, 2015, 5:12 PM
- A U.S. judge rejects arguments made by Valeant (NYSE:VRX), Bill Ackman, and Pershing Square Capital that an investor lawsuit should be dismissed because their actions surrounding the Allergan bid were not fraudulent.
- The lawsuit is from investors who sold Allergan (NYSE:AGN) stock in the two months before the defendants announced a $51B bid for the company, which later became hostile.. Little did investors know, but they may have been selling to Pershing which quietly built up a 9.7% stake in AGN, knowing Valeant was prepping a bid.
- In other Pershing Square news, the hedge fund lost 2.8% of its value in October, and now down 21.2% YTD.
Nov. 6, 2015, 3:09 AM
- In addition to providing tax benefits, a Pfizer (NYSE:PFE) merger with Allergan (NYSE:AGN) could bolster the U.S. drugmaker's growth prospects should it decide to sell or spin off its off-patent portfolio.
- Many Wall Street analysts believe Pfizer will decide to split late next year, as the company already treats its "established products" division and its "innovative" patent-protected medicines business as if they were separate units.
- Such a split would boost the company's profitability, because in-patents drugs command much higher prices that rise every year vs. off-patent medicines that become commoditized and their prices decline.
Nov. 4, 2015, 8:34 AM
- Allergan (NYSE:AGN) Q3 results ($M): Total Revenues: 4,088.9 (+90.1%); Total Product Revenues: 3,512.9 (+112.8%).
- Revenues by Business Segment: CNS: 657.9 (+18.6%); Eyecare: 539.9; GI: 398.6 (+21.9%); Women's Health: 272.8 (+14.2%); Cardiovascular: 155.3 (+12.5%); Infectious Disease: 52.3 (+130.4%); Urology: 69.3 (+159.6%); Other: 245.2 (-13.9%).
- Net Income: 5,231.6 (+601.7%); EPS: 13.29 (+281.9%) (includes discontinued ops); CF Ops: 1,048.2 (+100.7%).
- Key Product Sales: Botox: 604.5; Restasis: 328.3; Namenda XR: 214.5; Lumigan/Ganfort: 157.9; Asacol/Delzicol: 157.2; Bystolic: 155.7; Alphagan/Combigan: 120.8; Linzess/Constella: 117.5.
- Shares are up 1% premarket on average volume.
Nov. 4, 2015, 8:01 AM
- Allergan (NYSE:AGN) enters into an exclusive license agreement with privately held Mimetogen Pharmaceuticals to develop and commercialized its lead product candidate, tavilermide (MIM-D3), for the treatment of dry eye disease.
- The Gloucester, MA-based clinical stage biotech develops small molecule drugs that mimic the effects of neurotrophins, proteins that play an essential role in the survival and differentiation of neurons and help maintain the health and growth of many cells and tissues of the eye. Tavilermide is a small cyclic peptidomimetic of a member of the neurotrophin family called nerve growth factor (NGF). NGF, naturally occurring protein in the eye responsible for the maintenance of corneal nerves and epithelium, activates members of the tumor necrosis factor (TNF) superfamily called the tropomyosin-related kinase (TrkA) receptor and the p75NTR receptor. Tavilermide's unique mechanism of action targeting cell surface Trk receptors induces the production of mucin, a naturally occurring protein in tear film that serves as a lubricant and chemical barrier.
- Under the terms of the agreement, Mimetogen will receive an upfront payment of $50M, milestones and royalties on commercial sales. Allergan will also fund Phase 3 development of tavilermide.
- Chronic dry eye affects 25M Americans.
Nov. 4, 2015, 7:33 AM
- Allergan (NYSE:AGN): Q3 EPS of $3.48 beats by $0.29.
- Revenue of $4.09B (+90.2% Y/Y) beats by $60M.
Nov. 3, 2015, 5:30 PM
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Oct. 30, 2015, 6:46 AM
- Allergan (NYSE:AGN) unit Warner Chilcott agrees to pay $125M to resolve its civil and criminal liability regarding its alleged illegal promotion of the drugs Actonel, Asacol, Atelvia, Doryx, Enablex, Estrace and Loestrin.
- According to the Department of Justice, the company paid kickbacks to healthcare providers to prescribe its drugs in addition to filling out and submitting fraudulent prior authorization requests in order to evade Medicare and Medicaid formulary restrictions. Several executives have been indicted including former president Carl Reichel.
- The civil settlement resolves a whistleblower lawsuit brought by two former employees.
- Warner Chilcott was acquired by Actavis on October 1, 2013 who acquired Allergan on March 17, 2015.
Oct. 29, 2015, 9:13 AM| Oct. 29, 2015, 9:13 AM
Oct. 29, 2015, 8:44 AM
- Results from a Phase 2 clinical trial evaluating Revance Therapeutics' (NASDAQ:RVNC) injectable RT002 against placebo and Allergan's (NYSE:AGN) BOTOX Cosmetic showed RT002's superiority in treating glabellar lines (frown lines). The 268-subject study assessed the safety, efficacy and duration of effect for three doses (20, 40 and 60 units) of RT002, a botulinum toxin A drug candidate.
- At week 4, the primary efficacy measurement of at least a one-point improvement in frown lines based on the IGA-FWS scale for all three doses of RT002 was highly statistically significant compared to placebo (p<0.001). All three doses of RT002 achieved a 100% response rate (minimum of one-point improvement in frown lines) at week 4 versus 95% for BOTOX Cosmetic.
- The 40U dose of RT002 was statistically superior to BOTOX Cosmetic on all three responder definitions for the IGS-FSW duration of effect, with a median duration of 23.6 weeks compared to 18.8 weeks for BOTOX Cosmetic (p=0.020).
- At week 16, more than twice as many participants receiving RT002 40U and 60U maintained none or mild wrinkles per the IGA-FWS scale compared to those receiving BOTOX Cosmetic (p=0.002).
- RTOO2 was safe and well-tolerated across all cohorts.
- The company intends to report final results and meet with the FDA in H2 2016. A Phase 3 is expected to commence shortly thereafter. Revance believes the data will support a six-month duration of effect claim.
- Shares are up 58% premarket on robust volume.
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