WHEN: Today, Wednesday, April 6th
WHERE: CNBC's "Squawk on the Street"
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Allergan CEO Brent Saunders on CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET) today, Wednesday, April 6th. Following is a link to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000507411.
All references must be sourced to CNBC.
CARL QUINTANILLA: GOOD WEDNESDAY MORNING. WELCOME TO "SQUAWK ON THE STREET." I'M CARL QUINTANILLA ALONG WITH JIM CRAMER AND DAVID FABER AT THE NEW YORK STOCK EXCHANGE. A BIG MORNING WE BEGIN WITH AN EXCLUSIVE INTERVIEW WITH ALLERGAN CEO BRENT SAUNDERS AS THEY AND PFIZER WALK AWAY FROM THEIR PLANNED MERGER IN THE MEANTIME FUTURES ARE STEADY AHEAD OF FED MINUTES THIS AFTERNOON, EUROPE WITH SOME MILD GAINS AT THIS HOUR, OIL A 2% BOUNCE AHEAD OF INVENTORIES WHICH ARE ON THEIR WAY IN ABOUT 90 MINUTES.
DAVID FABER: WELL AS CARL JUST SAID THIS MORNING WE GOT NEWS FROM ALERGAN AND PFIZER WALKING AWAY FROM A DEAL SIGNED LAST NOVEMBER A $160B ACQUISITION OF ALLERGAN BY PFIZER AT THE TIME. ONE OF THE LARGEST DEALS WE RECEIVE IN THAT SECTOR ACTUALLY OVERALL, IN FACT, AND PART OF IT DONE IN PART NOT JUST TO TRY TO FUEL A GROWTH AT PFIZER BUT ALSO TO ALLOW IT TO ACCESS CASH OVERSEAS AND PERHAPS EVEN BRING IT BACK TO THE U.S. BUT TO BECOME A FOREIGN TAXPAYER BUT ON MONDAY UNEXPECTEDLY THE U.S. TREASURY ISSUED REGULATIONS THAT SEEMED AT LEAST TO BE VERY MUCH FOSUSED ON DERAILING THIS DEAL. THIS MORNING THE U.S. TREASURY AT LEAST WAS SUCCESSFUL IN DOING JUST THAT, PFIZER AND ALLERGAN GOING THEIR SEPARATE WAYS, PFIZER WILL PAY A $150 MILLION FEE TO ALLERGAN OVER TIME AND VARIOUS THINGS THAT IS HAS HAD TO SPEND MONEY ON AS A RESULT OF THE LAST FEW MONTHS THAT IT HAS PURSUED THE DEAL TOGETHER. NOW THEY'RE APART AND GOING THEIR SEPARATE WAYS. WE'RE JOINED ON SET IN AN EXCLUSIVCE INTERVIEW BY BRENT SAUNDERS, THE CEO OF ALLERGAN. THANKS FOR BEING HERE.
BRENT SAUNDERS: THANK YOU FOR HAVING ME.
FABER: IT'S BEEN A TUMULTUOUS COUPLE OF DAYS I KNOW.
SAUNDERS: IT HAS, YES.
FABER: YOU KNOW I WENT BACK TO A CONDERENCE CALL I THINK MAYBE IT WAS YOU LAST EARNINGS CALL I AM NOT SURE IT WAS IN FEBRUARY. YOU WERE ASKED ABOUT THE SPREAD OF THE DEAL YOU WERE TALKING ABOUT THE SPREAD. YOU SAID, MAN, IT'S BAFFLING FROM MY POINT OF VIEW AND FROM IAN REED THE CEO OF PFIZER. AS FAR AS WE AND PFIZER AND CONCERNED, WE THINK THIS DEAL WILL CLOSE. WE'RE IN A STRONG POSITION. I DON'T SEE ANY OBSTACLES. YOU GUYS WERE BLIND-SIDED.
SAUNDERS: WE WERE. LOOK. WE BUILT THIS DEAL AROUND THE LAW. THE REGULATIONS, ALL THE NOTICES THAT WERE PUT OUT BY THE TREASURY. AND IT WAS A HIGHLY LEGAL CONTRACT. WE FOLLOW THE RULES THAT CONGRESS HAD SET FOR COMPANIES LOOKING TO MOVE TO A FOREIGN DOMICILE. FOR THE RULES TO BE CHANGED AFTER THE GAME HAS STARTED TO BE PLAYED IS A BIT UN-AMERICAN BUT THAT'S THE SITUATION WE'RE IN AND ALLERGAN HAS A GREAT FUTURE. WE'RE A GREAT COMPANY AND SO IT WILL WORK OUT WELL.
FABER: DO YOU BELIEVE THE TREASURY SPECIFICALLY TARGETED YOUR DEAL?
SAUNDERS: IT CERTAINLY APPEARS THAT WAY. THESE RULES, THIS THREE-YEAR LOOKBACK WAS DESIGNED, I THINK, VERY SPECIFICALLY TO TARGET THIS DEAL. I DON'T BELIEVE BASED ON AN INITIAL REVIEW IT IMPACTS ANY OTHER DEAL AND VIRTUALLY ANY OTHER CIRCUMSTANCE.
FABER: I'M SURE YOU AND YOUR TEAM OF ACCOUNTANTS AND LAWYERS TRY TO LOOK AT THE FINE PRINT HERE AND TRY TO FIGURE OUT A WAY TO GET THIS DONE AND GIVEN THE ANNOUNCEMENTS THIS MORNING. I ASSUME THERE WAS NOT. WAS THERE ANY HOPE OF SALVAGING THE DEAL ONCE YOU SAW THE FINE PRINT AFTER WE GOT THE RELEASE FROM THE TREASURY?
SAUNDERS: THERE REALLY WASN'T. IT REALLY LOOKED LIKE THEY DID A VERY FINE JOB AT CONSTRUCTING A RULE HERE, A TEMPORARY RULE TO STOP THIS DEAL. OBVIOUSLY IT WAS SUCCESSFUL.
FABER: YEAH. I MEAN THREE YEARS IT WILL BE IN EFFECT FOUR. IT IS ALSO THE THREE-YEAR LOOKBACK PROVISION THAT WAS, OF COURSE, THE KEY TO KILLING THE DEAL. WHAT DOES IT DO, THOUGH, FOR ALLERGAN NOW BECAUSE IT WASN'T JUST THREE-YEAR LOOKBACKS. THERE'S WAS ALSO AN EARNINGS STRIPPING PROVISION THAT MAY AFFECT OTHER COMPANIES. HOW DOES IT AFFECT YOUR STRATEGY FROM IN TERMS OF ACQUISITIONS GIVEN YOUR SIZE IS GOING TO BE CALCULATED VERY DIFFERENTLY IF YOU USE STOCK IN THOSE DEALS?
SAUNDERS: INTERESTINGLY IT HAS ESSENTIALLY NO IMPACT ON ALLERGAN AS A STAND ALONE COMPANY AND, IN FACT, ARGUABLY IN A PREVERSE WAY IT ACTUALLY STRENGTHENS OUR STRATEGY AS A STAND ALONE COMPANY. SO THE THREE-YEAR LOOK BACK ONLY APPLIES IF SOMEONE WERE TO ACQUIRE ALLERGAN. IF ALLERGAN WERE TO GO OUT AND BUY SOMETHING ELSE, WE CAN USE STOCK. WE CAN USE A LOT OF STOCK AFTER OCTOBER OF THIS YEAR BECAUSE THAT'S THE THREE-YEAR ANNIVERSARY OF THE WARNER CHILCOTT DEAL. AND AS YOU KNOW, WE ARE GOING TO SELL OUR GENERICS BUSINESS. IT WILL CLOSE IN THE FIRST HALF OF THIS YEAR AMD WE WILL HAVE $40.5 BILLION OF PROCEEDS PRETAX. AND SO WE HAVE A LOT OF FLEXIBILITY. WITH RESPECT TO OUR TAX STATUS AND INCOME STRIPPING PROVISIONS OF THESE PROPOSED RULES, THEY HAVE NO MATERIAL IMPACT ON US WHATSOEVER.
FABER: NONE AT ALL.
SAUNDERS: NONE.
JIM CRAMER: ALL RIGHT. BRENT. YOUR STOCK AVERAGE, 299 BUCKS DURING THE SIX MONTHS BEFORE THE STORY BROKE. IT IS NOW GOING TO BE I DON'T KNOW 225/230 WHICH TO ME IT SAYS THE WHOLE MERGER WAS ILL-ADVISED. WHAT STEPS CAN YOU TAKE TO BRING YOUR STOCK BACK TO WHERE IT WAS BEFORE YOU EVER GOT INVOLVED WITH PFIZER?
SAUNDERS: LOOK. ALLERGAN, I THINK, HAS ARGUABLY ONE OF THE STRONGEST TOPLINE GROWTH PROFILES IN OUR INDUSTRY. WE HAVE ONE OF THE STRONGEST PIPELINES OF R & D ASSETS IN OUR INDUSTRY AND IN THE SEVEN THERAPEUTIC AREAS IN WHICH WE COMPETE WE ARE ONE OF THE STRONGEST PLAYERS IN EACH ONE OF THOSE. WE'RE SET UP FOR GREAT SUCCESS. I THINK AS THE MARKET DIGESTS, THE NEWS OF THIS DEAL STARTS TO FOCUS BACK ON THE FUNDAMENTALS OF THE ALLERGAN BUSINESS. THE EXCITEMENT WILL COME BACK TO ALLERGAN.
CRAMER: YOU HAVE TO HAVE A LOT OF CASH AFTER TEVA CLOSES. OBVIOUSLY PFIZER IS WILLLING TO PAY $16OM, YOUR STOCK IS GOING TO BE LIKE $89 BILLION, $90 BILLION BIG DISCREPANCY. WHO CAN YOU BUY? COULD YOU BUY CELGENE THAT'S COME DOWN IN VALUE, COULD YOU BUY BRISTOL WOULD YOU BUY VALIANT AND BECOME THE CEO OF VALVALEANT? TAKE THOSE ONE AT A TIME.
SAUNDERS: I CAN'T COMMENT ON A SPECIFIC TARGET --
CRAMER: EVEN VALEANT COME ON CAN'T YOU RULE IT OUT RIGHT HERE RIGHT NOW?
SAUNDERS: I'LL COME CLOSE. THIS IS HOW I'LL DO IT. ALLERGAN HAS ALWAYS BEEN A GROWTH PHARMA COMPANY. WE'VE ALWAYS BOUGHT GROWTH ASSETS, AND SO WHEN YOU LOOK AT THE PROFILE OF THE COMPANIES YOU MENTION, SOME ARE GROWTH ORIENTED, OTHERS ARE NOT. ANYTHING THAT IS A GROWTH ORIENTED BUSINESS WITH STRONG FUNDAMENTAL BUSINESSES AND A GOOD R&D PIPELINE TO SUSTAIN THAT GROWTH IS OF INTEREST TO US.
CRAMER: OKAY. $299. NOW $225, $230. $299 YOU CAME ON THE SHOW AND SAID, I WOULD NOT BUY BACK STOCK. WHY NOT COMMIT RIGHT HERE RIGHT NOW 10-15 BILLION DOLLARS BUY BACK THE STOCK BECAUSE IT IS MUCH CHEAPER THAN WHEN YOU STARTED THIS NONSENSE.
SAUNDERS: CLEARLY A GREAT OPPORTUNITY TO BUY BACK STOCK. UNFORTUNATELY A DECISION OF OUR BOARD OF DIRECTORS. WE WILL HAVE A BOARD MEETING WE'LL LOOK AT IT. WE CAN'T DO ANYTHING UNTIL WE CLOSE TEVA. WHICH WILL HAPPEN THE FIRST HALF OF THIS YEAR. ONCE THAT HAPPENS, EVERYTHING IS ON THE TABLE.
FABER: YOU'RE TALKING ABOUT A COMPANY THAT'S GOING TO DO $8 BILLION IN EBITDA, I THINK I AM RIGHT ROUGHLY IN THAT NUMBER HAVE NO DEBT ONCE YOU CLOSE THE DEAL. CLEARLY AN UNLEVERAGED BALANCE SHEET AND THE ABILITY TO POTENTIALLY LARGE DEALS FOR CASH. TO JIM'S QUESTION ABOUT VALEANT THOUGH, I WONDER, YOU RAN BAUSCH & LOMB IF THEY WERE TO SELL THAT OR EVEN SALIX I WOULD IMAGINE YOU MIGHT HAVE A FIT SO I UNDERSTAND -- I DON'T THINK ANYBODY'S GOING BUY VALEANT.
CRAMER: NO YOU COULD BE CEO OF VALEANT I AM SURE THEY WANTED TO BE CEO OF VALEANT.
SAUNDERS: I HAVE THE CEO JOB IN THE INDUSTRY.
FABER: POTENTIAL SALES, WHAT KIND OF ASSETS WOULD YOU BE LOOKING FOR? WOULD IT INCLUDE THE ONES THAT I MENTIONED THAT MIGHT BE FOR SALE FROM A VALEANT?
SAUNDERS: WE LOOK FOR ASSETS IN OUR SEVEWN THERAPEUTIC AREAS EYE CARE IS ONE OF THOSE, G.I. IS ANOTHER AND WE LOOK FOR GROWTH ORIENTED ASSETS AND HIGH QUALITY ASSETS. CLEARLY BAUSCH AND LOMB IS ONE OF THOSE. BAUSCH & LOMB IS A GOOD BUSINESS IT IS A BUSINESS I KNOW WELL AND ITS GOT TERRIFIC PEOPLE IN THAT BUSINESS THEY ARE REALLY GOOD PEOPLE IN THAT BUSINESS.
QUINTANILLA: DAVID TALKS ABOUT BEING BLINDSIDED BY THIS RULE CHANGE BUT THE TREASURY HAS TELEGRAPHED THEIR APPETITE TO MOVE IN THIS DIRECTION. WHY WAS THAT NOT CONSIDERED? WHY WAS THERE NOT MORE OF A HEDGE IN SEEING TREASURY MOVE LIKE THIS?
SAUNDERS: YEAH. WE WERE PREPARED FOR THIS, RIGHT? THIS WAS A CONTINUOUS PLAN CLEARLY. BUT WE WERE PREPARED FOR THE TREASURY TO DO SOMETHING EXTRAORDINARY AND CLEARLY THEY DID. AND SO OUR PIVOT BACK TO AN INDEPENDENT COMPANY IS STRAIGHTFORWARD. WE'RE READY, WE'RE EXCITED. OUR PEOPLE ARE ENERGIZED. OUR BUSINESS IS PERFORMING. WE ARE READY TO GO WE HAVE A GREAT PIPELINE. THAT BEING SAID I THINK WHAT TREASURY DID A LOT OF CANDIDATES TO TALK ABOUT BUILDING WALLS THEY JUST BUILT A WALL AROUND THE UNITED STATES KEEPING PEOPLE IN AND BASICALLY ALLOWING THE US TO BECOME UNCOMPETITIVE GLOBALLY AND IM NOT SURE THAT'S A GOOD THING FOR AMERICA.
FABER: BUT TO THE EXTENT THEN THAT YOU FORESAW THIS AS AT LEAST A REMOTE POSSIBILITY, WAS IT WORTH TAKING THE RISK OF DOING THIS DEAL?
SAUNDERS: CLEARLY WE THOUGHT THIS WAS A REMOTE POSSIBILITY SO THEREFORE THE BENEFITS OF THE DEAL OUTWEIGHED THE REMOTE RISK. UNFORTUNATELY, WE WERE WRONG, RIGHT? THE REMOTE RISK BECAME REALITY BUT WE WERE PREPARED FOR IT AND PFIZER WAS PREPARED FOR IT AND SO THE PIVOT HERE IS QUITE SIMPLE. REMEMBER, I WASN'T WALKING AWAY FROM THE COMPANY, I WASN'T DAY DREAMING ABOUT RETIREMENT, I WASN'T LOOKING FOR A NEW JOB. I WAS GOING WITH THE COMPANY AS WAS MOST OF MY MANAGEMENT TEAM SO WE'RE ENERGIZED. WE'VE STAYED ENGAGED THE ENTIRE TIME AND WE'RE READY TO GO.
CRAMER: ALRIGHT, LET'S LOOK AT THE POLITICAL LANDSCAPE. YOU'VE GOT HILLARY CLINTON. SHE WISHES THAT YOU MADE LESS MONEY, BUT TRUMP WISHES YOU MAKE LESS MONEY. I DON'T EVEN WANT TO KNOW, GO INTO WHAT SANDERS THINKS SHOULD HAPPEN. BUT HOW DO WE KNOW THAT AT 299 YOU DIDN'T SAY, YOU KNOW WHAT, WE CAN'T DO IT ANYMORE. WE NEED PFIZER MORE THAN PFIZER NEEDS US.
SAUNDERS: YEAH, I THINK THE ANSWER TO THAT IS WHEN YOU LOOK AT IAN READ'S STATEMENT TODAY THAT WE WERE AN ACCELERATOR TO PFIZER. WE REALLY LIKED PFIZER'S DISCOVERY RESEARCH CAPABILITIES, WE LIKED THEIR VACCINE BUSINESS, WE LIKED THEIR ONCOLOGY BUSINESS. BUT OUR STANDALONE BUSINESS IS BEST IN CLASS. AND SO WE'RE GOING TO HAVE NO ISSUE PIVOTING FORWARD HERE. WE'RE GOING TO HAVE NO ISSUE BEING A STRONG GROWTH PHARMA COMPANY WITH AN OPEN SCIENCE PIPELINE OF 70 LATE STAGE AND MIDSTAGE PRODUCTS TO FUEL THAT GROWTH.
CRAMER: WELL OK, YOU'RE A DOUBLE DIGIT GROWER AND YOU'VE GOT MERCK'S MULTIPLE WHICH WE KNOW IS NOT DOUBLE DIGIT. YOU'RE OBVIOUSLY, YOUR STOCK IS DEPRESSED FROM THE ARB SELLING IT. BUT WHEN I LOOK AT THE SITUATION, I HAVE TO WONDER. ARE YOU GOING TO CUT NUMBERS WHEN YOU REPORT?
SAUNDERS: WE'RE NOT. WE'RE GOING TO, IN FACT, HAVE AN INVESTOR CALL HERE TODAY. WE'RE GOING TO REITERATE OUR GUIDANCE THAT WE PROVIDED EARLIER THIS YEAR, I THINK YOU SAID FEBRUARY WAS THE DATE, AND WE'RE GOING TO CONTINUE TO FOCUS ON EXECUTING OUR BUSINESS, GROWING OUR BUSINESS. WHEN WE CLOSE THE TEVA DEAL, TALKING ABOUT HOW TO DEPLOY THAT CAPITAL IN THE MOST ACCRETIVE WAY FOR OUR SHAREHOLDERS AND SUSTAIN THE GROWTH PROFILE OF OUR BUSINESS.
FABER: TO THOSE WHO WOULD SAY LISTEN, YOU KNOW WHAT? I KIND OF AGREE WITH TREASURY BECAUSE ALLERGAN SLASH ACTIVIST WHICH WAS WHAT YOU WERE REALLY WAS NOTHING MORE THAN A SERIAL ACQUIRER, TRYING TO FATTEN ITSELF UP FOR AN EVENTUAL SALE. AND THAT'S ALL THE STRATEGY HAS BEEN ABOUT. YOU KNOW, GOBBLE, GOBBLE, GOBBLE IT UP AND THEN GET GOBBLED UP.
SAUNDERS: THAT'S PREPOSTEROUS, RIGHT. FIRST OF ALL, WE WOULD NEVER HAVE BEEN ABLE TO HAVE BEEN SMART ENOUGH, I THINK I'M PRETTY SMART BUT I'M NOT SMART ENOUGH TO PREDICT ALL THESE THINGS WOULD HAVE HAPPENED AND PFIZER WOULD HAVE COME CALLING WITH THE PREMIUM THEY DID. THAT BEING SAID, THE BLUE CHIP NAMES IN OUR INDUSTRY WERE BUILT IN PART BY M&A AND IN PART BY R&D INVESTMENT. OUR STRATEGY IS VERY SIMILAR TO THAT EXCEPT WE ADD A GROWTH ASPECT TO IT AND WE REALLY FOCUS ON EFFICIENT R&D SPEND AND BUYING HIGH GROWTH PROFILE ASSETS.
FABER: AND ALSO AN INVERTED, I MEAN, YOU HAVE A LOWER TAX RATE AND YOU HAVE MORE FREEDOM THAN DO MANY OF YOUR COMPETITORS NOW WHO SEEMINGLY, YOUR REFERENCE TO A WALL EARLIER, ARE WALLED OFF.
SAUNDERS: WELL THAT'S WHY ALLERGAN AS A STANDALONE COMPANY IS A SPECIAL ASSET, RIGHT. BUT TO THINK THAT M&A IS DEAD OR NOT THE RIGHT WAY IN PART TO BUILD A COMPANY IS PREPOSTEROUS, AS WELL. MOST OF THE BIG BLUE CHIP NAMES WERE BUILT THAT WAY AND A COMMITMENT TO R&D AND A COMMITMENT TO FINDING CURES AND TREATMENTS FOR UNMET NEED. ALLERGAN STANDS FOR ALL THOSE THINGS AS WELL BUT HAS A MORE EFFICIENT TAX STRUCTURE, HAS A STRONG BALANCE SHEET AND I THINK A REALLY STRONG SKILL AT BUYING ACCRETIVE GROWTH ASSETS.
FABER: WHICH IT SOUNDS LIKE YOU'RE PLANNING ON DOING ONCE YOU GET THE MONEY IN FROM TEVA.
SAUNDERS: ABSOLUTELY. IT WILL BE A STRONG PART OF OUR STRATEGY.
CRAMER: DO YOU HAVE A LIST?
SAUNDERS: YES. I'VE ALWAYS MAINTAINED A LIST. AND, YES, WE DO.
CRAMER: I GOTTA ASK YOU SOMETHING. VALEANT HAD THIS TERRIFIC, TERRIFIC DERMATOLOGICAL BUSINESS. THEY LAID OFF SOME PEOPLE IN DERMATOLOGY. YOU'VE GOT RESTYLANE FOR THIS PART, JUVEDERM, THAT'S THIS PART. I DON'T USE THIS MYSELF BUT I KNOW OTHERS WHO DO. YOU'VE GOT BOTOX OVER HERE. I MEAN HAVE YOU DESTROYED VALEANT'S DERMATOLOGICAL BUSINESS DURING THIS PERIOD OF GREAT TURMOIL WITH CEO MICHAEL PEARSON?
SAUNDERS: WE HAVE CONTINUED TO BE WINNING IN DERM, RIGHT. WE ARE THE STRONGEST PLAYER IN THE INDUSTRY. YOU'VE SAID IT.
CRAMER: HAVE YOU DESTROYED THEIR BUSINESS?
SAUNDERS: I THINK THEY HAVE DESTROYED THEIR BUSINESS, RIGHT.
CRAMER: SO YOU DON'T, ONCE AGAIN, NO INTEREST WHATSOEVER. LET'S SAY BILL ACKMAN CALLED YOU RIGHT NOW AND SAID LISTEN, WE'LL OFFER YOU A HUNDRED MILLION DOLLARS IF YOU WOULD BECOME CEO OF VALEANT. WOULDN'T YOU HAVE TO DO THAT?
SAUNDERS: I WOULD NOT DO THAT. I HAVE THE BEST CEO JOB IN THE INDUSTRY. I LOVE ALLERGAN, I LOVE OUR POSITION, I LOVE OUR FUTURE, I LOVE OUR PEOPLE. THERE'S NOT ONE TEMPTATION FOR ME TO LEAVE. AND, IN FACT, WITH PFIZER, I WASN'T GOING TO LEAVE.
CRAMER: HAS HE JUST NOT OFFERED YOU ENOUGH MONEY YET IN THOSE PHONE CALLS?
SAUNDERS: I WAS ANCHORED TO THIS BUSINESS. THERE'S NO MONEY HE COULD OFFER ME.
FABER: COME ON. BILL ACKMAN CALLING YOU – IS THAT A BENEFIT? HAVING BILL ACKMAN CALL YOU CONSTANTLY, IS THAT A GOOD THING? I'M NOT SURE.
SAUNDERS: I ACTUALLY LIKE BILL ACKMAN AND I THINK HE'S A SMART GUY. BUT I'M – YEAH.
CRAMER: HOW MANY OF THOSE CALLS DO YOU TAKE? YOU TAKE IT EVERY DAY?
SAUNDERS: I HAVE A RELATIONSHIP WITH BILL AND I HAVE A LOT OF RESPECT AND ADMIRATION FOR BILL. BUT THAT HAS NOTHING TO DO WITH VALEANT.
QUINTANILLA: HAVE YOU SPOKEN TO LEW SINCE THIS NEWS?
SAUNDERS: I HAVE NOT.
QUINTANILLA: NO? AND WHEN THE PRESIDENT SAYS THAT THESE TYPES OF STRUCTURES ARE INSIDIOUS, THAT THOSE COMPANIES RENOUNCE THEIR CITIZENSHIP, WHAT DO YOU SAY?
SAUNDERS: YEAH, I THINK OBVIOUSLY, THAT'S A MISGUIDED APPROACH. I THINK THE PRESIDENT SHOULD UNITE THE COUNTRY. I THINK WE ARE JOB CREATORS. THIS IDEA THAT WE SHIP JOBS OVERSEAS IS PREPOSTEROUS AS WELL. I KNOW I'VE USE THAT WORD A LOT WHEN WE DISCUSS THESE REGULATIONS. BUT WE'RE A JOB CREATOR. WE INVEST IN THE U.S. WE WILL CONTINUE TO INVEST OUR R&D DOLLARS IN THE UNITED STATES. WE WILL CONTINUE TO LOOK FOR CURES AND TREATMENTS TO BENEFIT THE AMERICAN PEOPLE. AND WE UNDERSTAND OUR SOCIAL CONTRACT WITH THE U.S. THIS IDEA THAT WE TAKE AND DON'T GIVE IS SIMPLY NOT TRUE. I THINK THE OTHER THING THAT IS IMPORTANT TO NOTE IS THAT BEING INVERTED AND HAVING THE TAX STRUCTURE ALLOWS US TO MORE EASILY INVEST IN THE U.S. THAN A U.S. COMPANY. THIS COUNTRY WAS BUILT BY BEING COMPETITIVE, BY BEING GLOBALLY COMPETITIVE. AND I THINK THIS ADMINISTRATION AND THESE TYPES OF POLICIES HURT AMERICA'S ABILITY TO COMPETE ON A GLOBAL SCALE. WE SHOULD BE TALKING ABOUT HOW TO ALLOW OUR COMPANIES TO INVEST, TO BULK UP IN THE UNITED STATES, NOT BUILD A WALL TO LOCK THEM IN.
FABER: DO YOU THINK IF PFIZER/ALLERGAN HAD BECOME A REALITY THAT PFIZER WOULD HAVE USED SOME OF THE $30-PLUS BILLION IT HAS OVERSEAS AND BROUGHT IT BACK TO THIS COUNTRY?
SAUNDERS: UNQUESTIONABLE. I THINK IF THE DEAL HAD GONE THROUGH, THE INVESTMENT IN THE UNITED STATES WOULD HAVE BEEN GREATER UNDER A DUBLIN-BASED PFIZER THAN IT CAN BE UNDER A U.S.-BASED PFIZER IN THIS ENVIRONMENT WITH THESE RULES AND THIS LACK OF COMPETITIVENESS OVER OUR TAX CODE.
FABER: I REALIZE YOU NOW ARE TWO COMPLETELY SEPARATE COMPANIES WITH SEPARATE STRATEGIES, BUT I'M CURIOUS. I MEAN, WHAT DO YOU THINK PFIZER DOES FROM HERE?
SAUNDERS: LOOK, I THINK PFIZER IS IN A STRONG POSITION. I THINK IAN READ IS A TOP NOTCH CEO. I THINK I GOT TO REALLY KNOW HIS MANAGEMENT TEAM AS PART OF THE PREINTEGRATION. I HAVE A TREMENDOUS RESPECT AND ADMIRATION FOR HIM. AND LIKE US, THEY HAD A CONTINGENCY PLAN IF THIS DIDN'T GO THROUGH. AND THEY'RE GOING TO MOVE FORWARD AND EXECUTE ON IT. SO, I'M SURE THEY'LL BE IN GREAT SHAPE.
CRAMER: OKAY. BRENT, WHEN YOU WERE ON "MAD MONEY" LAST, YOU SAID, WE BELIEVE THIS IS AMERICA. ONCE YOU FOLLOW THE LAW, YOU SHOULD HAVE CERTAINTY. FOR THEM TO COME IN AND TRY TO CHANGE THIS IN THE NINTH INNING SEEMS UNFAIR. IS THIS AMERICA?
SAUNDERS: WELL, I THINK THAT'S A GREAT POINT, JIM. WHEN GLOBAL COMPANIES LIKE US LOOK AT THE WORLD AND LOOK FOR CERTAINTY AND RULE OF LAW. WHEN WE THINK OF PLACES LIKE INDIA AND WHEN WE THINK OF OPERATING IN PLACES LIKE CHINA, WE WORRY ABOUT THE RULE OF LAW. DO WE NEED TO START WORRYING ABOUT THAT IN THE GREATEST COUNTRY IN THE WORLD – THE UNITED STATES? IT CERTAINLY RAISES A QUESTION WHEN YOU SEE THE GOVERNMENT CHANGE THE RULES WHEN THE GAME HAS ALREADY STARTED. THAT JUST SEEMS UN-AMERICAN TO ME.
FABER: AND IF JACK LEW WERE SITTING HERE, WOULD YOU YELL AT HIM? WHAT KIND OF A CONVERSATION WOULD ENSUE?
SAUNDERS: NO, LOOK. WE HAVE TO BE CONSTRUCTIVE. WE WANT TO SEE THIS COUNTRY BE COMPETITIVE. WHEN YOU STRIP IT ALL AWAY, THE MOST IMPORTANT THING THAT THIS COUNTRY SHOULD FOCUS ON IS REFORMING ITS TAX CODE TO MAKE IT MORE COMPETITIVE GLOBALLY AND TO MAKE IT EASIER FOR GLOBAL COMPANIES TO INVEST IN THE UNITED STATES AND CREATE MORE JOBS. NOT STOP THEM.
FABER: BUT YOU SPEAK LIKE YOU'RE AN AMERICAN COMPANY, BUT YOU'RE NOT AN AMERICAN COMPANY. I MEAN, EVERYTHING YOU TALK ABOUT IS THIS COUNTRY BECAUSE YOU ARE A PART OF IT. YOU'RE BASED IN NEW JERSEY, EVEN THOUGH YOU ARE A DUBLIN COMPANY. YOU CAN UNDERSTAND WHY SOME PEOPLE CERTAINLY FOR POLITICAL FODDER MIGHT SAY WHAT'S GOING ON HERE.
SAUNDERS: WELL, FIRST, I PERSONALLY AM AN AMERICAN. AND I'M A PATRIOT. AND I DO BELIEVE IN THIS COUNTRY. OUR COMPANY IS A GLOBAL COMPANY AND WE PARTICIPATE IN BUSINESS ON A GLOBAL SCALE. THAT BEING SAID, THIS IS THE GREATEST COUNTRY IN THE WORLD TO DO BUSINESS IN. AND WE INVEST IN THE UNITED STATES, WE DO OUR R&D IN THE UNITED STATES, WE HIRE SCIENTISTS IN THE UNITED STATES, WE DO MANUFACTURING IN THE UNITED STATES. SO WE'RE DEEPLY COMMITTED TO PARTICIPATING IN THE U.S. AND BY THE WAY, WE PAY OUR U.S. TAXES IN THE UNITED STATES.
FABER: AND, FINALLY, JIM MENTIONED THE POLITICAL CAMPAIGN, BUT WE'RE GOING END UP WITH A DIFFERENT PRESIDENT COME JANUARY OF NEXT YEAR. IS IT YOUR EXPECTATION, GIVEN EVERYTHING YOU'RE HEARING, THAT HEALTH CARE IS GOING TO CONTINUE TO BE UNDER THE MICROSCOPE AND SUFFER AS A RESULT THAT WE'VE ALREADY SEEN IN TERMS OF THE MULTIPLE COMPRESSION FROM WHATEVER MAY COME REGARDLESS OF WHICH PARTY TAKES THE WHITE HOUSE?
SAUNDERS: YEAH, I DON'T THINK THAT'S LIKELY. I DO THINK THAT HEALTH CARE WILL CONTINUE TO BE UNDER PRESSURE DURING THE CAMPAIGN SEASON. I DO THINK THAT WE AS AN INDUSTRY HAVE TO CONTINUE TO BE SMART AND MAKE SURE WE VALUE PRICED OUR MEDICINES TO AVOID SOME OF THE CONTROVERSIES FROM SOME OF THE PLAYERS IN THE INDUSTRY TODAY. THAT BEING SAID, HEALTH CARE REFORM WAS A PRIORITY OF THE OBAMA ADMINISTRATION. I DON'T THINK IT WILL BE PART OF THE PRIORITIES OF WHOEVER THE NEXT ADMINISTRATION IS.
FABER: BRENT SAUNDERS, THANK YOU FOR COMING DOWN HERE TODAY.
SAUNDERS: YEAH, THANK YOU FOR HAVING ME.
FABER: VERY MUCH APPRECIATE IT. BRENT SAUNDERS, OF COURSE, CEO OF ALLERGAN.
About CNBC:
With CNBC in the U.S., CNBC in Asia Pacific, CNBC in Europe, Middle East and Africa, CNBC World and CNBC HD , CNBC is the recognized world leader in business news and provides real-time financial market coverage and business information to approximately 371 million homes worldwide, including more than 100 million households in the United States and Canada. CNBC also provides daily business updates to 400 million households across China. The network's 15 live hours a day of business programming in North America (weekdays from 4:00 a.m. - 7:00 p.m. ET) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News bureaus worldwide. CNBC at night features a mix of new reality programming, CNBC's highly successful series produced exclusively for CNBC and a number of distinctive in-house documentaries.
CNBC also has a vast portfolio of digital products which deliver real-time financial market news and information across a variety of platforms. These include CNBC.com, the online destination for global business; CNBC PRO, the premium, integrated desktop/mobile service that provides real-time global market data and live access to CNBC global programming; and a suite of CNBC Mobile products including the CNBC Real-Time iPhone and iPad Apps.
Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://www.nbcumv.com/mediavillage/networks/cnbc/.