Valeant Pharmaceuticals’ (TSX:VRX) ongoing attempt to acquire botox-maker Allergan has grabbed headlines for months, but one portfolio manager believes the company is a buy regardless of how that situation plays out.
Greg Taylor, VP & Portfolio Manager at Aurion Capital Management was on BNN’s “Market Sense” Tuesday to reveal his top picks. The fund manager says the “always controversial” Valeant earns a place on his list because the company’s management is deftly navigating a space characterized by an abundance of opportunity.
“I think Mike Pearson is doing a really good job exploiting a very fragmented industry,” says Taylor. “A lot has been made about them just acquiring companies and scaling and firing everyone, but think there is more to the story than that.”
Taylor that while Valeant management wants to acquire Allergan, he thinks there are many other suitable targets out there. He says the specialty pharma industry is “overbloated” by too much overhead and marketing costs.
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And if Valeant does succeed in its ongoing efforts to acquire Allergan?
“If Allergan works this is going to be a massive company that everyone is going to have to look at,” says the portfolio manager. “It will be a top ten in market cap in the country and I think there is still a lot of room for opportunity.”
The Globe and Mail today reported that Valeant plans to raise its offer for Allergan from the current bid of approximately $176 a share. In April, the company teamed up with noted hedge fund manager Bill Ackman to launch a hostile cash and share bid for Allergan.