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.
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.
Through its indirect subsidiary Actavis Funding SCS, Actavis (ACT -1.2%) privately offers three, five, ten and thirty-year senior unsecured notes. Net proceeds will be used to consummate the Forest Labs acquisition, to refinance Warner Chilcott's 7.75% senior notes due 2018, to pay related fees and expenses and for general corporate purposes.Shareholders will most assuredly have a keen interest in the prices and terms of the debt, but they will have to wait for the regulatory filings to find out. Post your comment!
Actavis (ACT -0.4%) will reshuffle its executive team after its acquisition of Forest Labs (FRX -0.3%) closes. Actavis Chairman and CEO Paul Bisaro will become Executive Chairman, Forest President and CEO Brent Saunders will become CEO and President reporting to Mr. Bisaro and Actavis Global Operations President Robert Stewart will become COO reporting to Mr. Saunders. Post your comment!
An analysis of more than 120 studies finds that naltrexone, Forest Labs' (FRX) Campral (acamprosate), J&J's (JNJ) Topamax (topiramate) and H. Lundbeck A/S' Selincro (nalmefene) all helped alcoholics reduce their drinking. The oldest FDA-approved alcoholism drug, Antabuse (disulfiram), did not prevent a return to the bottle. Alkermes Plc's (ALKS) injectable Vivitrol (naltrexone) reduced patients' heavy drinking days but there were not enough studies to draw conclusions. The drugs are underutilized because many primary care physicians refer patients with drinking problems to specialists like drug counselors or to groups like AA. None of these providers can prescribe medicines. There are almost two dozen drugs that are used off-label to combat alcoholism. No one product works for everyone, though. On average, 12 people need to be treated with acamprosate for one person to benefit. For naltrexone, the ratio is 20:1. Predictably, the researchers say more studies are needed. Post your comment!
Actavis (ACT), which will be acquiring Forest Labs in mid-14, will provide updated guidance once the acquisition goes through.
Net revenues: $2.66B (+40%).EPS: $0.55 (-30.4%).CF Ops: $440M (+101.3%).Updated 2014 guidance:Financial forecast including Forest Labs (FRX) will be made mid-year after the transaction closes.Q2 non-GAAP earnings will be slightly lower than Q1.Standalone forecast made on January 31 should be considered withdrawn.(ACT) Post your comment!
Forest Labs (FRX) also announced its intention to acquire Furiex which will expand its gastrointestinal franchise.
In yet another example of the recent struggles of biotechs, recent IPO Adamas Pharmaceutics (ADMS +2.8%) exchanges hands for $13.40/share, down 16% from its initial price of $16 and down 22% from its opening day high of $17.24.The company generates its revenues from collaboration and licensing deals but has two compounds in development that it plans to sell directly.ADS-5102 (amantadine) is a treatment for levadopa-induced dyskinesia, a movement disorder in Parkinson's sufferers after long term exposure to levadopa. A Phase 3 clinical trial will start this year. The company forecasts its NDA submission to happen in the first half of 2016.ADA-8704 is a once-daily combination of Namenda XR (memantine HCL) and donepezil HCL for moderate to severe dementia in Alzheimer's patients. The NDA has been submitted to the FDA triggering a $40M milestone payment from partner Forest Labs (FRX +0.1%).Revenues for 2012 and 2013 were $37.5M and $71.1M, respectively.Net income was $17.7M and $50.9M, respectively.CF Ops was $52M and $26.8M, respectively.(IPO) (FPX) Post your comment!
Forest Labs and partner Gedeon Richter's antipsychotic candidate, cariprazine, met the primary endpoint in a phase IIb study.
Forest Labs (FRX) and Gedeon Richter (OTC:GEDSF) have announced positive top-line results in a Phase II trial of the companies' Cariprazine therapy for the treatment of bipolar depression. The results come after Cariprazine also performed well in a Phase IIb trial for patients with Major Depressive Disorder. (PR) Forest is being acquired by Actavis (ACT). Post your comment!