Watching this webcast, with the ceo of valiant speaking right now.
What he discusses is a very done and dusted deal.
You can see his involvement in every step of the process.
This is a fairly compelling and devastating presentation in terms of the hopes of maintaining independence in part of their takeover target.
We have the financing lined up, yes, we will observe every bit of antitrust risk ourselves, we will sell from our own portfolio whatever the fpc requires.
Step-by-step he has gone through and laid out a very powerful case as to why they should do it.
But there is still the white knight issue, they made it look like it is a very attractive product for someone else.
What they showed is also a very large commercial for maybe someone else, johnson & johnson, third in the space might look into them.
35% of the business of allergan has nothing to do with government subsidies.
A huge percentage of this is 100% cash, cash payout.
This will be an attractive morsel for other countries besides valeant.
And now the bankers are working overtime to find a white night?
X this definitely puts the company in play.
This definitely -- this definitely puts the company in play.
You have shyer in ireland, and you have a great tax benefit their and we have seen this before in the pharma industry and we have seen a precedent for this.
But this is not a slamdunk for ackman or valeant at this point.
They do have other options but this is a watershed moment for activism, like the monitor last night -- this really legitimizes them, they are partnering up to make a hostile bid for another strategic.
This is unprecedented.
You have to find the right partner and valeant is that partner.
It is not like teaming up with pmg or exxon, he is a former mckinsey reporter who was taken from goldman sachs.
Just a month ago, erik and i said that with the ceo of valeant, and acquisitions are their style.
Listen to this.
We have done our research on development and total and for the last decade or so this has not been positive for the industry.
So we make a much better use of our capital -- buying products that are approved by companies that have approved products, and grow that way.
You know, drew, this is a good opportunity to bring you win.
You cover the drug industry.
Balanced approach to intellectual property is totally different than anyone else in the industry.
That is what they are alluding to, that they do not believe in early-stage development.
They have these trials to bring mature drugs to market, let the small companies do that and we will buy them up.
That is there strategy, buy it and sell it and valeant has been a real outlier in the drug industry, like this bang of vikings.
What they have to do is go out and look for a deal, we saw this with the activists where it -- where valeant may have approached them, they did the four a steal and now we are going to speak about allergan no w, if they want to stay independent do they have to go out and buy somebody?
You have to fight the vikings and lose or join the village and try to protect yourself.
There are unique challenges to every company in pharmaceuticals right now.
The problem is you have these big, established companies that have already wanted to be innovative, they wanted to have innovative technologies.
But the biotech stock index has just 10 on fire.
Since 2012. they can't buy those biotech companies, so they have to look at other options.
What are they going to do?
You look at the deal today, this is an introspective play.
Let's do what shareholders have been wanting for us to do, get out of the businesses we are losing in and get down with winners.
And maybe wait for the activists to show up.
In this case it is almost different, he has decided to not even play it.
He could be rolling up taco bell in kansas.
He is not particularly interested in anything with respect to r&d. 85% of the products do not have a patent.
So renewed lenses, people are very perceptive about what they put on their skin and shove into their eyes.
If you look at what other countries spend on r&d, for approval, you can get that money back.
The idea that this is a cash pay business, let's say you are a pharmaceutical maker, with an $84 per year hepatitis drug -- and the u.s. government is upset, if you are getting paid not just through consumer cash that is coming out of their pocket, you have all sorts of other concerns.
You can be in the cosmetics business, a nonregulated business, that is potentially a much higher margin is this with a lot less political risk and higher pay or risk over the next few years.
When he was talking about all of the product line across eyecare and dental, he talked about six percent growth in this sector, 78% growth in that sector.
None of this is the explosive i have the cure to hepatitis c -- but this cost you $90,000 per year to make this happen.
He talked about an eye cream that is $250. doctors will share this for $500. this is an all cash business.
We could see someone else step in here, another white night.
What is the likelihood that carl icahn could roll up on his horse.
No one likes messing with ackman's game more than carl.
He may be receiving phone calls, would you consider helping out with another firm.
A big holder in this -- there is another big hedge fund.
Carl did very well with forest.
Forest labs, one of his big, signature turnovers.
You could see him get along for the sport of bothering bill, i think it is more likely to be a legitimate investment banker deal calling up.
You know he is getting 53 phone calls today.
The bankers are sweating it out right now, the fact they don't have a seat at this table.
This is a feast on wall street today.
I was thinking about it.
If ackman's working in this role, what would any banker bring to this deal.
-- they are trying to get on the other side.
To provide advice to allergan.
When ackman is aboard --they
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