Allergan still 'open-minded' about large mergers post Pfizer - CEO

Allergan's mega-merger with Pfizer may be off – but Allergan CEO Brent Saunders has said the company could still make big deals if the opportunity arises.

Saunders said in a conference call following Q1 results that Allergan would probably use proceeds from the $40.5 billion sale of its generics business to Teva to fund smaller M&A deals, as well as repurchasing shares and paying off debts.

The Teva deal looks likely to go ahead next month, despite a two-month delay due to requirements from the US regulator that the Israeli company sell off some product lines.

Saunders added that he expected to spend $10 billion on a share repurchase scheme, and $8 billion on repaying debts if the deal closes as expected.

Saunders said: "The best way to advance our growth pharma strategy is to bolster our therapeutic area leadership both with tuck-in product acquisitions and with intellectual property R&D asset acquisitions."

He pointed out that Allergan did around 10 of these smaller deals last year and has already done two more in Q1.

Allergan bought Topokine and a late-stage under-eye bag drug for $85 million last month.

But the company will remain open to larger deals if they arise. Saunders said: "If there was a transformational deal like Allergan, which was a bit of a one-in-a-million type of opportunity to be a white knight to buy a once-in-a-lifetime kind of asset like Allergan, certainly we're going to stay open-minded to that."

Saunders was referring to the deal where his former company, Actavis, swooped to buy Allergan for $66 billion at the end of 2014, saving it from a hostile takeover by Valeant. Generics firm Actavis, headquartered in Ireland where tax rates are lower, then took Allergan's name.

In Q1 results Allergan said sales climbed 48% to $3.8 billion, slightly below market expectations of $3.95 billion.

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