Actavis PLC’s recent decision to take on the name and ticker symbol of Allergan Inc. after it completes its $70 billion acquisition of the Irvine-based drugmaker next month brought plaudits from the local business community, where the move was hailed as a worthy acknowledgment and good business sense.
Keeping Allergan sends “a powerful message to the ophthalmic community and the local community,” according to James Mazzo, chief executive of Irvine-based AcuFocus Inc. and an Allergan veteran of 22 years before it spun its medical device business into what is now Abbott Medical Optics in Santa Ana.
“Allergan is synonymous with ophthalmology,” said Mazzo, who also noted the influence of Allergan founder Gavin Herbert. “Everybody knows Allergan.”
Retaining the Allergan name is “critical” when it comes to matters such as practitioner and employee comfort, Mazzo said.
Having a solid brand name—the Allergan name goes back to 1948—and affiliation with doctors is “critical” in an ophthalmology company’s success, Mazzo said.
Ryan Abbate, who recently retired from his post as president of Pacific Communications—an Allergan subsidiary and its advertising agency of record for the Natrelle 410 silicone breast implant and Latisse prescription treatment for eyelashes—said the decision to keep the Allergan name is “a very good one.”
“What they probably did is evaluate equity in the name Allergan and realize how significant it was with many of the audiences that they are going to be targeting,” Abbate said.
Allergan is a bigger name than Actavis, he added, not only in Southern California but “everywhere.”
“Branding is all about equity and what you establish over time, and so you just never want to walk away from established equity. And that’s what Allergan has as a brand, especially with the professionals. And that’s not only in the aesthetics area—it’s in ophthalmology, dermatology, neurology, all the areas that Allergan plays in. It is a bellwether corporation.”
The combined company will use Allergan for its corporate name and for its global branded drug portfolio, while retaining the Actavis name for select geographic regions and products.
Actavis is based in Ireland and keeps a headquarters for operations in Pasipanny, N.J.
Shareholders will vote on a formal proposal for the name change at the drugmaker’s annual general meeting.
Company spokesperson David Belian said that meeting hasn’t been scheduled yet, but “based on past practice, it is held in the spring.”
Shareholders of both companies will hold separate special meetings on March 10 to vote on Actavis’ cash-and-stock buy of Allergan, a deal that was valued at about $71 billion late last week.
Approvals are generally anticipated, with an official close expected later in March or April.
Actavis Chief Executive Brent Saunders, who will lead the combined company, took to the financial media last week to discuss the name change.
“Allergan really stood for innovation, it stood for customer focus—that really describes, I think, the new company that we are today, better than Actavis,” Saunders said during an appearance last week on the CNBC program “Squawk Box” to discuss the adoption of the Allergan name and other matters, including a recent Forbes magazine cover that pegged him as “Wall Street’s Drug Dealer.”
“… Really when you step back and look at it from the customer’s perspective, which is how we really wanted to look at it, Allergan was the better of the two equities as a company,” Saunders said.
Mediha DiMartino contributed to this story.
