Allergan's bitter struggle to remain independent has taken another turn, with the drugmaker unveiling plans to shed 13% of its workforce this year to "improve efficiency and productivity".
The move is designed to boost profits and convince shareholders that remaining a standalone business is a better option than accepting Valeant's hostile advances.
The Botox maker said the restructure will see the loss of around 1,500 employees and 250 currently vacant positions, but that, as a result, it expects annual pre-tax savings of around $475 million in 2015, and a 20% boost in earnings over a five-year period to 2019.
All pharmaceutical R&D programmes in the clinic will continue, it stressed, noting that any reductions in discovery programs will not impact approvals within the next five years.
Meanwhile, Allergan also booked earnings of $418 million for the second quarter, up from $361 million a year ago, on sales growth of nearly 16% to just over $1.8 billion.
Complaints to US SEC
Elsewhere, as the battle hots up, Valeant said today it has complained to both the Autorite des Marches Financiers in Quebec and the US Securities and Exchange Commission about Allergan's "apparent attempt to mislead investors and manipulate the market for Valeant common shares by continuing to make false and misleading statements" regarding its business.
The latest misleading statements were made last Friday, Valeant said, when Allergan "falsely asserted" in an SEC filing that pharmaceutical sales at Bausch + Lomb (owned by Valeant since last year) were stagnant or declining, when in fact they grew around 6%.
"We can no longer tolerate unjustified attacks on Valeant's business and strongly believe we are obligated to take action to protect Valeant shareholders," said chief executive Michael Pearson.
He also called on Allergan stockholders to call a special meeting to "amend the company's unduly onerous and non-stockholder friendly by-laws, remove six directors, and propose the appointment of new directors, who will thoroughly evaluate Valeant's offer".
The deal currently on the table values Allergan at around $53.8 billion.
Allergan shareholder dumps stake
And in yet another twist, Capital Research and Management, Allergan's largest stock holder, has reportedly sold almost all of its stake in the firm.
Citing people close to the matter, the Wall Street Journal reported that the move came after the group met with Allergan chief executive David Pyott. Alex Arfaei, an analyst at BMO Capital Markets, issued a research note saying that “many investors will view Allergan’s proposed cost-cutting measures as validation of Valeant’s arguments” and added that “Allergan’s options are becoming increasingly limited”.
