Activist investor Carl Icahn disclosed a ???large position??? in Allergan (AGN) Tuesday morning.
Carl Icahn appears to be a big fan of Brent Saunders. After Icahn was instrumental in placing his favorite CEO at the top of Forest Labs before it was acquired by Actavis several years ago - a deal which made then Forest Labs investor Carl Icahn hundreds of millions in profit - the billionaire investor is now doubling down on Saunders, and moments ago the billionaire investor announced that he has acquired a "large position" in Allergan, and confirms he is "very supportive of CEO Brent Saunders." Does this mean that Allergan, whose stock recently tumbled after the Pfizer deal was terminated due to Congressional intervention, is once again back in play? From the release: May 31, 2016 We have recently acquired a large position in Allergan and are very supportive of CEO Brent Saunders. We were instrumental in bringing Brent on board as the new CEO of Forest Labs a few years ago and worked cooperatively and constructively with him to help increase value for all Forest shareholders. Less than a year later Forest was acquired by Actavis (which subsequently merged with Allergan) resulting in massive gains for Forest shareholders. While we at that time disposed of our position in Forest, we still have always maintained great respect for Brent. We have every confidence in Brent’s ability to enhance value for all Allergan shareholders. AGN stock is loving it.
Pfizer has an enterprise value of $221 billion. Allergan has an enterprise value of $160 billion. The two companies combined would have a joint EV of nearly $400 billion and a market cap of well over $300 billion. That would make a potential merger between the two the largest M&A deal in history, while a "mere takeover" of Allergan by Pfizer would still rank it as the fourth largest deal in history and the largest deal in a year that is shaping up as a record for M&A. And, according to the WSJ, such a deal may be just a few months if not weeks away. To wit: Drug makers Pfizer Inc. and Allergan PLC are considering combining, in what would be a blockbuster merger capping off a torrid stretch for health care and other takeovers. Pfizer recently approached Allergan about a deal, according to people familiar with the matter, with one of them adding that the process is early and may not yield an agreement. Other details of the talks are unclear. Allergan currently has a market capitalization of $112.5 billion, meaning that a deal for the company could be the biggest announced takeover in a year that is already on pace to be the busiest ever for mergers and acquisitions. Granted, this won't be the first time the two pharmaceutical behemoths have been said to consider merging, although it would be the first time for Allegan in its current iteration which is a combination of Forest Labs, Watson, Warner Chilcott, Actavis and, of course Alergan; furthermore this time may be also different when one considers the recent last gasp surge in deal announcements, which is nothing more than an attempt by companies to lock in their near all time high stock prices as a merger currency, while debt is still debt. Will the deal pass regulatory scrutiny? If enough palms are greased, sure. More complex would be the whole tax-avoidance issue: "A tie-up with Allergan could also be a way for New York-based Pfizer to lower its corporate tax rate. Allergan is based in Dublin, which has a significantly lower tax rate than the U.S." What is more interesting will be whether the Fed will observe what would be the mother of all mergers, and finally grasp the magnitude of the mother of all equity bubbles that it has blown. Alas, the answer will once again be a resounding now, even when this debt-funded deal leads to the CEOs becoming richer than their wildest dreams, and leads to the prompt pink slipping of several tens of thousands of workers on both sides. Simply because when the bubble is this big, there is no more stopping it. Finally, for those interested, here is a list of all the largest M&A deals to date courtesy of CityAM:
Allergan's (AGN) supplemental new drug application seeking approval for a single-dose regimen of its antibiotic Dalvance is under review in the U.S.
Shares of Freeport-McMoRan Inc. (FCX) surged 9.97% on the announcement that two of Icahn's nominees will join Freeport's board.
Allergan plc (AGN) expects revenues to cross $8 billion in the second half of 2015 and achieve double-digit top-line growth post Teva deal.
Allergan (AGN) acquires central nervous system focused company, Naurex, to boost mental disorder portfolio.
Earlier today we observed that in a world in which central banks have implicitly banned risk with their actions over the past 7 years, hedging long exposure is meaningless (and when central banks do lose control, a few shorts will have zero impact when the market is simply shut down and all trades or liquidations are promptly banned) and as a result hedge funds are set to underperform the S&P500 for the 7th year in a row. Yet riding on the laurels of a business model that is no longer relevant, many still are fascinated to analyze and over-analyze the holdings of hedge funds at any given time: just observe the frenzy that surrounds 13-F release day 45 days after the end of any given quarter (especially when it comes to central bank 13-F filings, such as those by the Swiss National Bank). So for all those who need validation that they are part of a big hedge fund hotel club, which implicitly means there are few if any incremental fast money buyers left, and wish to know the top hedge fund holdings, here is a list of the 50 stocks which according to Goldman "matter the most" to hedge funds, the stocks which appear among the largest 10 holdings of hedge funds. There are few surprises in this list which traditionally sees very little changes among the top 20 holdings, but what is most notable is that as of June 30, AAPL (nor FB) is no longer the most beloved stock by the hedge fund community. These have both been replaced with the latest pharmaceutical serial acquirer of companies, and a stock which has seen the activist presence of both Carl Icahn (via Forest Labs) and Bill Ackman (via Valeant), Allergan which is now the stock that has the largest number of funds with AGN as a top 10 holding. As noted above, this means that with virtually everyone in the Allergan pool, the stock will likely only go down from here, especially if hedge funds suddenly find themselves in liquidation mode and have to sell their biggest winners or most liquid holdings. What about on the other end: the 50 stocks most shorted by hedge funds? The answer is shown below, and what we find surprising is that as of June 30, DIS was the stock which Goldman estimates had the largest value of hedge fund short interest. Which perhaps explains the recent media meltdown and why two weeks ago, Disney along with other content providers, suffered a historic - and long overdue according to many - plunge. Source: Goldman
Actavis (ACT) will be reporting first quarter 2015 results on May 11.
As we look at John Boehner and what he has accomplished as speaker, or rather not accomplished, I believe he is the most "do-nothing" Speaker of the House in history. Recently he opened the 114th Congress by using more taxpayer dollars to call for the repeal of Obamacare/Affordable Care Act...again, for the 56th time! Is Boehner right? Should Obamacare/ACA be repealed? Maybe. However, in the five years the Republicans have had to work on a replacement or suggestions for the ACA, they have come up with nothing but a nine page document that neither funds healthcare nor tells how many people it would serve. Some facts Boehner should consider: Fact 1: Millions of Americans have signed up for the ACA. If repealed, millions would lose their health insurance. Any serious illness would cause many people to face bankruptcy or death because of lack of care. Fact 2: Insurance companies are for the ACA because their profits have increased substantially since it was signed into law. In addition, hospitals that were going bankrupt because people couldn't pay their bills are now becoming more financially stable. Fact 3: Many Republican governors are beginning to see the value of supporting the Medicaid Expansion and the ACA. Some facts voters should consider: Fact 1: Prior to the passage of the ACA, (December 10, 2008) Boehner bought numerous health insurance company stocks, including tens of thousands of dollars in Cardinal Health, Cigna, and Wellpoint, according to Peter Schweitzer, author of Throw Them All Out: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals, and Cronyism that Would Send the Rest of Us to Prison. Boehner also purchased shares in the Big Pharm companies Amgen, Johnson & Johnson, Forest Labs, Covidien, and Pfizer." At least two of those stocks -- Cardinal Health and Wellpoint -- are up over 100 percent since Boehner's investment. Pfizer is up over 50 percent. None of the stocks is down. This "insider trading" was considered illegal, but Congress struck down that law for them. Fact 2: He has voted to repeal the ACA numerous times, tried to sue Obama when ACA was not implemented fast enough and now is threatening to sue Obama again. Fact 3: As leader of the House, he has not shown that he can lead. Boehner cannot bring his caucus together nor get any reasonable legislation passed. The Republicans continue to fight amongst themselves while the far right extremists inadvertently destroy the Party; and therefore our country's two-party democracy. Fact 4: Instead of sending a good budget to the Senate, Boehner sent a bill to secure our homeland with amendments that he knows won't pass the Senate nor be signed by Obama. Through these actions he is jeopardizing our national security. Fact 5: With Congress' approval rating at 13 percent, his legacy is being tarnished by his continual groveling to lobbyists and rich donors, his total disregard for his Ohio constituents, and disregard for the needs of the country. Fact 6: Boehner frequently golfs with lobbyists, and sleeps in a plush two-bedroom apartment rented for him by John Milne, a Beltway lobbyist. He has shown he will do anything to win an election and retain his position as speaker. Fact 7: He recently invited Israeli Prime Minister Benjamin "Bibi" Netanyahu to address Congress behind President Obama's back. Boehner's actions were out of line and could provoke a rift between Israel and America. While both Israel and the U.S. are opposed to the visit, it is still scheduled. Fact 8: Boehner continues to say: "I'm not qualified to debate the science over climate change...But, I am astute enough to understand that every proposal that has come out of this administration to deal with climate change involves hurting our economy and killing American jobs." 98% of scientist disagrees. Fact 9: A true effort put towards reversing the effects of climate change and global warming would increase jobs, decrease unemployment, and help the American economy. Building wind farms, doing research to discover new energy sources, etc. are just some of the ways jobs would be created. Fact 10: Boehner along with other Republicans continue to block funding to rebuild our infrastructure. By blocking the funding, they are actually costing Americans good paying jobs while making the US less competitive in the world market. Republicans do not like to raise taxes but, as elected officials, the Republicans need to put what's best for the country in front of their party mantra. A small gas tax would fund this project, not increase the deficit, and put millions to work. Fact 11: In Boehner's state of Ohio: • 42% of Ohio's roads are in poor or mediocre condition. • Driving on roads in need of repair costs Ohio motorists $1.685 billion per year in extra vehicle repairs and operating costs - $212 per motorist. • 9.1% of Ohio bridges are considered structurally deficient. • 15.9% of Ohio bridges are considered functionally obsolete. • 45% of Ohio's major urban highways are congested resulting in wasted time and additional fuel costs for motorists. You've now read through a series of facts. Did Ohio make the right choice when they elected Boehner? Is he really serving the people? Or, Is John Boehner really the most "do-nothing" Speaker of the House in history? As a "Speaker of the House" is he helping our country by revisiting the same issues over and over rather than moving forward? As a "Speaker of the House" is he helping the country by trying to sue a two time elected President multiple times? As a "Speaker of the House" is he helping by interfering in world affairs? As a "Speaker of the House" is he helping by holding on to old Republican ideas rather than creating progressive ones? We the people must demand more of our elected officials. We must vote for candidates that will work together and move our country forward rather than hold it back. Until then, expect more of the same from Boehner and his colleagues.
Actavis' (ACT) fourth quarter results surpassed expectations by a wide margin.
Actavis (ACT) is scheduled to report fourth-quarter 2014 results before the opening bell on Feb 18.
Actavis (ACT) to divest U.S. rights of Doryx brand to Mayne Pharma, to boost focus on core areas.
Actavis' (ACT) third quarter results were boosted by the Forest Labs and Warner Chilcott acquisitions.
According to a new federal database put online last week, pharmaceutical companies and device makers paid doctors some $380 million in speaking and consulting fees over a five-month period in 2013. Some doctors received over half a million dollars each, and others got millions of dollars in royalties from products they helped develop. Doctors claim these payments have no effect on what they prescribe. But why would drug companies shell out all this money if it didn't provide them a healthy return on their investment? America spends a fortune on drugs, more per person than any other nation on earth, even though Americans are no healthier than the citizens of other advanced nations. Of the estimated $2.7 trillion America spends annually on health care, drugs account for 10 percent of the total. Government pays some of this tab through Medicare, Medicaid, and subsidies under the Affordable Care Act. But we pick up the tab indirectly through our taxes. We pay the rest of it directly, through higher co-payments, deductibles, and premiums. Drug company payments to doctors are a small part of a much larger strategy by Big Pharma to clean our pockets. Another technique is called "product hopping" -- making small and insignificant changes in a drug whose patent is about to expire, so it's technically new. For example, last February, before its patent expired on Namenda, its widely used drug to treat Alzheimer's, Forest Laboratories announced it would stop selling the existing tablet form of in favor of new extended-release capsules called Namenda XR. The capsules were just a reformulated version of the tablet. But even the minor change prevented pharmacists from substituting generic versions of the tablet. Result: Higher profits for Forest Labs and higher costs for you and me. Another technique is for drug companies to continue to aggressively advertise prescription brands long after their twenty-year patents have expired, so patients ask their doctors for them. Many doctors will comply. America is one of few advanced nations that allow direct advertising of prescription drugs. A fourth tactic is for drug companies to pay the makers of generic drugs to delay their cheaper versions. These so-called "pay-for-delay" agreements generate big profits for both the proprietary manufacturers and the generics. But here again, you and I pay. The tactic costs us an estimated $3.5 billion a year. Europe doesn't allow these sorts of payoffs, but they're legal in the United States because the major drug makers and generics have fought off any legislative attempts to stop them. Finally, while other nations set wholesale drug prices, the law prohibits the U.S. government from using its considerable bargaining power under Medicare and Medicaid to negotiate lower drug prices. This was part of the deal Big Pharma extracted for its support of the Affordable Care Act of 2010. The drug companies say they need the additional profits to pay for researching and developing new drugs. But the government supplies much of the research Big Pharma relies on, through the National Institutes of Health. Meanwhile, Big Pharma is spending more on advertising and marketing than on research and development - often tens of millions to promote a single drug. And it's spending hundreds of millions more every year lobbying. Last year alone, the lobbying tab came to $225 million, according to the Center for Responsive Politics. That's more than the formidable lobbying expenditures of America's military contractors. In addition, Big Pharma is spending heavily on political campaigns. In 2012, it shelled out over $36 million, making it the biggest political contributor of all American industries. Why do we put up with this? It's too facile to say we have no choice given how much the industry is spending on politics. If the public were sufficiently outraged, politicians and regulatory agencies wouldn't allow this giant ripoff. But the public isn't outraged. That's partly because much of this strategy is hidden from public view. But I think it's also because we've bought the ideological claptrap of the "free market" being separate from and superior to government. And since private property and freedom of contract are the core of the free market, we assume drug companies have every right to charge what they want for the property they sell. Yet in reality the "free market" can't be separated from government because government determines the rules of the game. It determines, for example, what can be patented and for how long, what side payoffs create unlawful conflicts of interest, what basic research should be subsidized, and when government can negotiate low prices. The critical question is not whether government should play a role in the market. Without such government decisions there would be no market, and no new drugs. The issue is how government organizes the market. So long as big drug makers have a disproportionate say in these decisions, the rest of us pay through the nose. ROBERT B. REICH's film "Inequality for All" is now available on DVD and blu-ray, and on Netflix. Watch the trailer below:
By John Vincent:This article is part of a series that provides an ongoing analysis of the changes made to Carl Icahn's US stock portfolio on a quarterly basis. It is based on Icahn's regulatory 13F Form filed on 08/14/2014. Please visit our Tracking Carl Icahn's Portfolio series to get an idea of his investment philosophy and our previous update highlighting the fund's moves during Q1 2014.This quarter, Icahn's US long portfolio went down marginally from $32.93B to $32.53B. The portfolio increased 8%, 24% and 14.50% respectively in the previous three quarters. The number of holdings in the portfolio remained steady at 19: the huge 8.59% position in Forest Labs was eliminated and a new position in Gannett was added. The largest holding is Icahn Enterprises with an allocation of 32.44% of the US long portfolio. It is followed by Apple Inc. with an allocation of 15.07%. It is a very concentrated Complete Story »
Carl Icahn touts record at companies where he gets board seats, like Forest Labs, Chesapeake and Herbalife.
Forest Labs (FRX +1.9%) reports top line results from three Phase 3 clinical trials evaluating the safety, efficacy and tolerability of vilazodone in adult patients with generalized anxiety disorder (GAD). In all three studies, patients receiving vilazodone demonstrated statistically significant improvements as measured by the Hamilton Rating Scale for Anxiety total score versus placebo.The company expects to file an ANDA for a generic version of the branded product in 2015. 1 comment!
Forest Laboratories, Inc. (FRX) has postponed the final phase of switching to late 2014 and intends to continue marketing Namenda IR till the fall of 2014.