We Will Move Quickly on Cephalon Bid: Valeant CEO
Canadian drugmaker Valeant Pharmaceuticals International made an unsolicited $73 a-share bid, worth $5.7 billion, to buy Cephalonand plans to make its case directly to Cephalon shareholders.
"What our intent is to move quickly, to go next week and we don't think there's a whole lot from a legal stand point they can do to slow us up," J. Michael Pearson, chairman and CEO of Valeant told CNBC on Wednesday.
"We move very, very fast and we think that is one of our big advantages," Pearson said.
"In our hands if you figure out how much cash we can generate over the next 5 and 10 years, it will represent a huge return for our shareholders as well," he added.
The volumes on many of Cephalon's key pharmaceuticals are down sharply, which they are making it up with very significant price increases.
"Many of those ... taking the high price increases are the ones that will be going off patent and will be facing genric competition. So we're not building in our forecast that they will around for long period of time," Pearson explained. "It certaintly is a short-term strategy and I would agree ... that massive price increase is not sustainable."
"Our real strategy is based on returning shareholder vaule through an acquistion path, and once we get the products, growing those products as well as we can. You should expect to see us on the acquidtion trail," added Pearson.
The $73-a-share bid, which Valeant expects to finance entirely with debt, represents a 24 percent premium over Cephalon's [CEPH ]closing share price of $58.75 on Tuesday, and about a 29 percent premium over the U.S. drugmaker's 30-day trading average.
Valeant, formed when Canada's Biovail bought U.S.-based Valeant in September for $3.3 billion and took its name, said it planned to propose a slate of directors to replace Cephalon's board with its own nominees.
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