No­to­ri­ous ac­tivist in­vestor Carl Ic­ahn buys small stake in Al­ler­gan

Ac­tivist in­vestor Carl Ic­ahn has tak­en a small stake in Al­ler­gan, join­ing a grow­ing list of weighty share­hold­ers who could in­flu­ence the com­pa­ny’s strat­e­gy at a time when in­vestors are push­ing for changes.

With com­pe­ti­tion edg­ing in on its two top sell­ers — Botox and Resta­sis — Al­ler­gan $AGN has strug­gled to ap­pease its share­hold­ers with a plan of ac­tion. The com­pa­ny’s ef­fort to pro­tect its Resta­sis IP through the con­tro­ver­sial — and ul­ti­mate­ly failed — trib­al li­cens­ing strat­e­gy didn’t help mat­ters.

Brent Saun­ders

We don’t know the size of Ic­ahn’s stake, or what his plans might be for the com­pa­ny. But we do know Ic­ahn has been rather friend­ly in the past to Al­ler­gan CEO Brent Saun­ders, push­ing for him in 2013 to be­come CEO of For­est Lab­o­ra­to­ries (which through merg­ers and ac­qui­si­tions be­came Al­ler­gan).

Top share­hold­ers are look­ing for ac­tivist in­vestors to make some changes at the Dublin-based drug­mak­er, Bloomberg, which first re­port­ed the news, re­ports, cit­ing un­named sources “fa­mil­iar with the mat­ter.” In ad­di­tion to Ic­ahn, ac­tivist in­vestor Alex Den­ner at Saris­sa Cap­i­tal al­so has a stake in Al­ler­gan. Den­ner is known for be­ing Ic­ahn’s for­mer pro­tégé and for his his­to­ry of spurring ac­qui­si­tions at com­pa­nies in which he in­vests. His stake in Al­ler­gan is no­table even though its small, con­sid­er­ing Saris­sa’s fair­ly re­cent stake in Iron­wood, Al­ler­gan’s part­ner on IBS and con­sti­pa­tion drug Linzess.

David Tep­per

Plus, Ic­ahn’s in­vest­ment fol­l­lows David Tep­per’s 1% stake at Al­ler­gan. Tep­per, founder and pres­i­dent of Ap­paloosa, just made head­lines this Tues­day for his let­ter to Al­ler­gan push­ing the drug­mak­er to over­haul its man­age­ment.

“It is time for Al­ler­gan’s man­age­ment to con­cen­trate on run­ning a world class phar­ma­ceu­ti­cal and aes­thet­ics busi­ness and forego thoughts of, or the ex­hil­a­ra­tion from, an am­bi­tious ac­qui­si­tion strat­e­gy,” Tep­per wrote in a let­ter to Al­ler­gan’s board.

Among Tep­per’s sug­ges­tions was split­ting up the roles of CEO and chair­man, both of which are oc­cu­pied by Saun­ders at the mo­ment.

Ic­ahn, who had in­vest­ed in Al­ler­gan in the past, be­lieves the com­pa­ny’s stock is un­der­val­ued, the sources said, ask­ing not to be iden­ti­fied be­cause the mat­ter is con­fi­den­tial.

Al­ler­gan re­cent­ly did a strate­gic re­view of the com­pa­ny, com­ing out af­ter with plans to sell its women’s health and in­fec­tious dis­ease units to fo­cus on med­ical aes­thet­ics, CNS, eye care and GI — ar­eas in which the com­pa­ny be­lieves it’s com­pet­i­tive to ri­vals.

Al­ler­gan is­sued this state­ment in re­sponse to ques­tions about Ic­ahn’s stake:

“Al­ler­gan wel­comes all in­vest­ments in our com­pa­ny. We main­tain an ac­tive di­a­logue with our share­hold­ers and val­ue their con­struc­tive in­put and ideas on de­liv­er­ing long-term val­ue.”

The com­pa­ny’s stock is up 2% on the news.


Im­age: Carl Ic­ahn. GET­TY IM­AGES

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