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In reaching its determination to reject the Exchange Offer, the Allergan Board noted, among other considerations:

·         The Exchange Offer is grossly inadequate and substantially undervalues Allergan’s industry-leading position, financial performance, strong balance sheet, exceptional management and growth prospects.

–        Allergan has a longstanding track record of innovation and operational excellence that has created strong and sustainable stockholder value over a substantial period of time.

o   Allergan has routinely delivered compelling results, achieving compound annual increases in revenue and non-GAAP diluted earnings per share of approximately 15.7% and 18.4%, respectively, since 1998.

o   Allergan has created significant value for its stockholders over the last five years, generating a 256% price return compared to a 113% price return in the S&P 500.

–        Its belief that Allergan’s promising outlook should create significant near-term and long-term value for stockholders.

o   As previously announced, given the strength in its business, Allergan expects to:

·      Increase non-GAAP diluted earnings per share by 20 to 25 percent and continue to generate double-digit revenue growth in 2015.

·      Produce double-digit sales growth and produce non-GAAP diluted earnings per share compounded annual growth of 20 percent over the next five years.

·      Generate approximately $14 billion in additional free cash flow over the next five years.

o   The Company will provide an update to its stockholders on near-term value-driving events on or around the time of Allergan’s second quarter 2014 earnings announcement.

–        Allergan’s future prospects are driven by a robust pipeline of new products and services arising from a longstanding and successful dedication to research and development.

o   Allergan has a track record of exceeding its guidance every year for the past 15 years, including through numerous business cycles.

o   The Board believes Allergan’s ongoing commitment to extensive and efficient investment in research and development will create substantial value for stockholders and customers.

–        Allergan has a strong balance sheet and ample leverage capacity.

 

·         Its belief that Valeant’s business model creates significant risks and uncertainties for Allergan’s stockholders.

–        Valeant’s acquisition-based revenue growth is unsustainable.

–        Valeant’s anemic organic growth is driven by unsustainable price increases.

–        Valeant’s projected synergies claims are aggressive, and Valeant’s lack of investment would put Allergan’s core business at risk under Valeant’s ownership.

–        Valeant discloses far less in its financial statements than Allergan and its industry peers.

–        Valeant’s R&D capabilities pale when compared to Allergan’s track record of innovation and value creation.

The Lucentis vs. Avastin question has a long history. Roche’s Genentech unit allegedly threw up barriers to ophthalmic use of Avastin in the U.S. by cutting off distribution to ophthalmologists. The company says Lucentis is safer than Avastin for eye injections, because Avastin has to be repackaged in syringes for that use, and that repackaging can cause infections. Several clusters of serious eye infections have been traced to repackaged Avastin.

Meanwhile, the National Institutes of Health funded a head-to-head study of the two drugs to see whether Avastin really is an effective substitute, and the study authors concluded that it is more-or-less equally effective, albeit with some differences in side effects. But Lucentis is FDA-approved for eye use and Avastin is not, and Medicare payments tend to encourage eye doctors to use Lucentis for wet AMD and other eye conditions.

Shire – Reports last week listed the company as a potential suitor for NPS Pharmaceuticals, a $3.5 billion company. NPS Pharma boasts meds for short-bowel syndrome and hypoparathyroidism that would fit right in with Shire’s rare-disease focus, Wedbush told the news service. Other potential targets could include Prosensa Holding ($RNA) or Sarepta Therapeutics ($SRPT) because of their muscular dystrophy assets.

“If they want to stay independent, then going on a bit of a shopping spree makes it harder for another entity to go after them,” Piper Jaffray analyst David Amsellem told Bloomberg. “They will be approached. They probably have been approached.”

Allergan ($AGN), which is eager to dodge its own predator, the M&A machine Valeant ($VRX). The Botox maker has reportedly already made one play for Shire, and sources told Reuters back in April that Allergan was preparing another.