Skip to main content
Complete Olympic Games coverage at your fingertips
Your inside track on the Olympic Games
Enjoy unlimited digital access
$1.99
per week for 24 weeks
Complete Olympic Games coverage at your fingertips
Your inside track onthe Olympics Games
$1.99
per week
for 24 weeks
// //

This March 20, 2002 file photo shows a vial of Botox, made by Allergan.

DAMIAN DOVARGANES/The Associated Press

Since 2008, Valeant Pharmaceuticals has acquired 75 companies. Its latest target? Botox-maker Allergan Inc.

In its quest to become one of the five biggest pharmaceutical firms in the world, Valeant Pharmaceuticals International Inc. is focusing on a surprisingly small area: the face. The Laval, Quebec-headquartered company has been making acquisitions at a furious pace over the past few years, but its broadened product lineup is still geared toward dermatology, eye care, oral health and cosmetic treatments–lubricating skin, clearing vision, whitening teeth and erasing pimples. Valeant made an offer – together with Pershing Square Capital Management CEO Bill Ackman – in April for Botox-maker Allergan Inc., in a stock-and-cash deal worth about $48-billion. Soon, its offerings could smooth out wrinkles, too.

This strategy resembles that of several large food-and-beverage companies, with the likes of PepsiCo and Starbucks busily expanding their offerings to try and grab a bigger share of their customers' stomachs. But Valeant's approach is hardly an imitation: It has become a standout for the way in which it targets and absorbs acquisitions – about 75 of them since 2008, including Bausch + Lomb and 11 others last year. Mike Pearson, Valeant's chief executive, prefers what he calls durable health care products – established brand names that don't rely on patents, many of which can be bought over-the-counter; 85 per cent of Valeant's products fit this description, giving the company smoother, more predictable sales.

Story continues below advertisement

Valeant also takes a different approach to the research and development of new treatments: The firm doesn't do much of it, based on the view that it's an inefficient use of cash. Rather, Valeant spends less than 3 per cent of its revenues on R&D, versus an average of 16 per cent among the biggest industry players. By gutting R&D departments following acquisitions and dealing with duplications in areas such as sales and administration, Valeant can squeeze out savings – an estimated $2.7-billion in the case of Allergan – and make the deals contribute to earnings relatively fast.

Of course, it also helps when you are dealing with just one body part – and the face is one of the most lucrative parts going.

The Deals

2014
Allergan Inc.
Botox
$48-billion

2013
Bausch + Lomb Holdings Inc.
Biotrue contact lens solution
$8.7-billion

2012
Obagi Medical Products Inc.
Neotensil for reducing under-eye bags and wrinkles
$418-million

2012
Medicis Pharmaceutical Corp.
Solodyn oral antibiotic for pimples
$2.6-billion

2012
OraPharma Inc.
EZ White tooth whitening system
$312-million

2011
iNova Pharmaceuticals
DermaDrate skin moisturizer
$701-million

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies