Allergan issued the following statement from its Board of Directors in response to a public shareholder letter from Appaloosa hedge fund manager David Tepper earlier this week that stated the drugmaker should consider a merger or selling itself if it is “unable or unwilling to hold management accountable for its shortcomings or find a suitable replacement.”
The letter states:
“While we appreciate the input of Appaloosa as we do all of our shareholders, we strongly disagree that an immediate separation of the CEO and Chair positions is warranted. Implementing a leadership change in the manner Appaloosa is recommending would be highly disruptive to the company and diminish Mr. Saunders’ ability to continue to execute Allergan’s strategy to create a world-class global biopharmaceutical business and develop the company’s promising pipeline. In contrast, the shareholder proposal that our Board supports minimizes disruption and allows for the separation of the Chair and CEO positions with the next leadership change, as these resolutions typically provide.
Over the past few years, Allergan has been executing a strategic transformation from Watson, a US-based generic drug company, into a global biopharmaceutical leader focused on four key therapeutic areas, where it has strong leadership positions and significant opportunities for growth. In 2018, the company exceeded its financial performance targets, advanced its robust pipeline and executed its disciplined capital allocation plan. Allergan’s long-term growth targets remain intact and the company is expecting a number of important pipeline milestones in 2019.
Allergan has a high-caliber Board of Directors with six directors who have been added in the last two years including Bob Hugin, former Chairman and CEO of Celgene, who was appointed on February 18. Allergan’s Board of Directors firmly believes that the current combined Chairman and CEO role, together with a strong Lead Independent Director role, our slate of highly qualified independent directors and robust governance policies, provide effective oversight and best position Allergan for long-term success as the company executes its strategy.”
Shareholders will be able to obtain free copies of the Proxy Statement and any other documents relating to the Annual General Meeting of Shareholders filed with the SEC by Allergan through the website maintained at the SEC here or on Allergan’s website. Shareholders are advised to read the Proxy Statement when it is available because it contains important information.”