How tough will it be to run Actavis-Allergan combined?

How tough will it be to run Actavis-Allergan combined 1

Allergan Inc. is an American based global pharmaceutical company which develops and manufactures products on ophthalmic pharmaceuticals, dermatology, neuroscience, urology and cosmetics. Founded in 1948, it has been one of the popular companies in the pharmaceutical industry which has affected the markets by its performance. Being one of the top names, Actavis recently bought Allergan Inc. to bolster its position in the top 10 global growth pharmaceutical company. The company posted a $23 billion in revenues. However, Actavis PLC Chief Executive Brent Saunders faces challenge of running combined Actavis-Allergan.

Brent Saunders is now known as the drug industry’s most prolific deal maker this year and this deal has made him one of big pharmaceuticals best managers. In a very short span of time, Brent Saunders has managed to make more than $100 billion because of mergers and acquisitions. Recently, the company bought Botox maker Allergan Inc. for $66 billion. According to NASDAQ, “Mr. Saunders may have made his job more difficult by making a shareholder-friendly pledge that revenues at the combined company will grow at least 8% a year. That is a lofty target for any big drug maker, where earnings and sales typically grow a few percentage points a year.”

Actavis defeated Valeant Pharmaceuticals in a battle to sign Allergan. This has made the company so big that Actavis-Allergan combined will make around $24 billion in yearly sales. The company will have about 30,000 employees and an extensive portfolio including Botox antiwrinkle injections, the Alzheimer’s treatment Namenda, and a generic version of the Lidoderm pain patch.

Hence on the basis of revenues, Actavis will make its name in the list of the top 10 biggest drug makers in the world. However it is believed that Brent Saunders has never run an organization which is so big and diversified. Therefore, this will put the Chief Executive of the company in some serious pressure. NASDAQ says, “The Company’s branded drug business will have to cope with some aging drugs facing generic competition or pricing pressure, while the generic business must keep a tight lid on costs.”

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