NEWSMAKER-Valeant CEO breaks the mold in building drug empire

Tue Apr 22, 2014 5:01pm EDT
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By Rod Nickel

April 22 (Reuters) - At any given time, the acquisitive chief executive of Valeant Pharmaceuticals Inc is brokering multiple deal discussions and eyeing as many as 50 buying opportunities.

It's not the usual way of doing business in the drug sector, where research and development is often considered a company's lifeblood. But then there is little that's typical about Michael Pearson's approach to business.

Pearson's latest target, with help from activist investor Bill Ackman, is Allergan Inc, maker of anti-wrinkle treatment Botox. Valeant and Ackman's Pershing Square Capital Management launched an unsolicited $47 billion bid on Tuesday to buy the company.

The deal is another bold step in a strategy Pearson put into motion soon after leaving McKinsey & Co, where he spent 23 years advising companies - including Valeant - on turnarounds, acquisitions and strategy. Within the pharmaceuticals industry, that makes him a consummate outsider, a Canadian-born CEO with the eye of a strategic management consultant.

Named Valeant's chief executive in 2008, Pearson started snapping up dermatology products such as sunscreen and anti-aging items in a plan with aggressive revenue growth targets. In 2010, Canada's Biovail Corp and U.S.-based Valeant merged, with the combined company assuming the Valeant name, the Canadian head office, and keeping Pearson as CEO.

"What he has done so far is quite brilliant," said Gautam Dhingra, chief executive of High Pointe Capital Management, a Valeant shareholder. "Mike Pearson, coming in as an outsider who didn't grow up in the pharma industry, although he consulted in the pharma industry, perhaps he was able to take a more objective and calculating look."

Pearson tapped Howard Schiller, a former chief operating officer of the investment banking division at Goldman Sachs , to be his chief financial officer in 2011, a move that has helped Valeant's acquisitive strategy.

The plan that has so impressed Dhingra rests on three pillars, he says:   Continued...