The “new” Allergan Inc. is set to move its medical dermatology business to Irvine as part of its specialty pharmaceutical base in the wake of Actavis PLC’s $70 billion-plus buy of the Botox maker.
“The good news is Brent Saunders [current Actavis chief executive who will be CEO of the combined company] has been very, very clear that the businesses and the R&D supporting those businesses will remain in Irvine,” David Pyott, Allergan’s current chief executive, said during a luncheon presented by the Irvine Chamber of Commerce earlier this month.
The decision seems to ensure that the company will retain the campus in Irvine that has been its headquarters for more than 40 years.
“The site at Dupont Drive—as much as anything is forever—will be here because that’s where the expertise is,” Pyott said. “It’s a very rational decision.”
Pyott’s comments came a few days before Allergan shareholders voted last week to approve the sale to Actavis, which is based in Dublin, Ireland, and has operating headquarters in Parsipanny, N.J.
The size of the combined company’s eventual workforce in Irvine—currently about 2,400—remains unclear as the integration of the two companies plays out. The upper echelon of Allergan’s Irvine-based executive ranks will be trimmed nearly wholesale, starting with Pyott, who could end up as a director of the combined operation but has ruled out any day-to-day role going forward.
Other cuts are expected among the various segments of the Irvine operations, which is weighted heavily toward research and development and marketing teams.
“Naturally, when the company is sold … the finance and a lot of the legal stuff will go to Parsippany, N.J.,” Pyott said. “There’ll be a lot of positions here eliminated in Irvine.”
Actavis noted in an integration update posted on its “Our Winning Way” employee website that it expects “the majority of US employees will be notified of their employment status within 2-weeks following the close of the transaction.”
Allergan pledged to trim its workforce here and elsewhere as it sought to boost earnings in a bid to hold off last year’s hostile takeover attempt by Canada-based Valeant Pharmaceutical International Inc. and activist investor Bill Ackman of New York.
The company in January named Allergan veterans—exceptions to the general cuts in the upper ranks—to head two of its key business lines for the combined company. Paul Navarre will lead the International Brands Division, and Philippe Schaison will head Allergan Medical.
There has been no definitive word on any eventual job shifts or cutbacks in Irvine, and Actavis spokesperson David Belian declined comment last week on how many jobs it would be moving to Orange County with the arrival of the acquiring company’s medical dermatology business.
Eye drugs—Allergan’s historical core—will also remain in Irvine.
Actavis does not break out dermatology into a specific revenue category, although it lists it as part of a group of “established brands” that accounted for $755.7 million in sales last year.
Allergan’s “skin care and other” category, under which dermatology falls, logged sales of $523.6 million.
Actavis’ medical dermatology business includes Sarecycline, an antibiotic for treating acne, and Cordran Tape, used to relieve psoriasis, eczema and contact dermatoses, or skin irritations. Allergan’s medical dermatology business includes acne treatments Aczone and Tazorac.
Actavis confirmed in a recent Securities and Exchange Commission filing that “all Actavis Dermatology products … will report into the U.S. Medical Aesthetics business unit under Philippe Schaison.”
The new company calls for medical dermatology to be headed by Laurent Combredet, who currently serves as general manager of Allergan’s SkinMedica cosmeceutical business near the Orange-San Diego county line in Carlsbad.
The combined company’s U.S. medical aesthetics unit also encompasses Allergan flagship Botox Cosmetic, the Juvéderm facial filler line, and the Natrelle breast implant
line.
