Biotech Values

[DewDiligence]

AGN, which closed 2% above the nominal value* of VRX’s offer, has implemented a poison pill:

http://online.wsj.com/news/articles/SB10001424052702304734304579518423370599030

Allergan Inc. has adopted a poison-pill defense in the wake of an unfriendly advance from larger rival Valeant Pharmaceuticals International Inc., which has teamed with activist investor William Ackman to make a $46 billion bid for the company.

If any unapproved investor acquires 10% or more of Allergan's stock, other stockholders will have the right to buy discounted shares, Allergan said late Tuesday. The defense mechanism, officially known as a shareholder rights plan, effectively prevents Mr. Ackman, who disclosed a 9.7% stake in the company on Monday, from significantly growing his position. It also prevents Valeant from taking its hostile offer straight to shareholders in a direct offer to purchase stock, known as a tender offer.

*VRX’s offer consists of $48.30 cash + 0.83 VRX shares for each AGN share.