Allergan Industry Analysis

622 words | 3 page(s)

Allergan is a global multi-specialty pharmaceutical company that develops and commercializes a broad range of innovative biological, medical and aesthetic products. The company is a leading producer of eye care, surgical devices, aesthetic pharmaceuticals, including best-selling Botox. Allergan is headquartered in Irvine, California where it was founded in 1950 (SEC, 2014). A month ago, the company was acquired by another pharmaceutical leader, Actavis, in a takeover that presents Allergan new opportunities for growth and development.

The total revenue of the company in 2014 amounted to $723,7.9 million, as compared to $6,300.4 million in 2013 and $5,646.6 in 2012 (SEC, 2014). The company has extensive commercial reach, with its marketing and sales capabilities being currently located in 100 countries (Allergan, 2015). Most of its products are manufactured at its own plants in Texas, Ireland, Brazil, Costa Rica and France (SEC, 2014). Allergan positions itself as the company that makes a difference in the quality of life of its customers, enabling them to feel good and to look beautiful.

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Its strategy is to develop new products that address previously unmet or insufficiently met concerns of their consumers related to debilitating chronic conditions and aging. Allergan has a broad and diversified brand profile across the areas of neuromodulators, ophthalmology, aesthetics and dermatology. The ophthalmic products are designed to treat glaucoma, the syndrome of dry eye, inflammation and retinal diseases. In the field of aesthetics, the company offers breast implants and dermal fillers, while its skin care products treat acne and psoriasis. One of the most well-marketed products of the company is Botox, which is represented both as a neuromodulator and an anti-wrinkle cosmetic drug (SEC, 2014).

One of the main risks associated with the Allergan business is the highly competitive environment that it operates in. Succeeding in pharmaceutical and medical device industry requires constant innovation, with necessary considerations for safety at the same time. Another important risk factor is potential inability of the company to maintain protection for its intellectual property rights (SEC, 2014). Moreover, it is at risk of infringing the intellectual property rights of other pharmaceutical companies if it fails to ensure the originality of its technologies. Also, since this industry is subject to rigorous government regulations, the company can never be sure that its investment in development will actually result in effective products being approved by government commissions.

The company has strong commitment to innovation: thus, in the current year, it has already invested $1.7 million in R&D (Allergan, 2015). However, Allergan does not rely on its own research and development activities only, but also discovers and adopts new technologies through extensive collaboration, joint ventures and acquisitions. Thus, in 2013, Allergan acquired the company MAP Pharmaceuticals, which was then developing the new treatment for migraine and other neurological conditions (SEC, 2014).

In March, 2015, Allergan was acquired by the company Actavis, creating a global and diversified pharmaceutical company that will become one the the largest drug makers in the world (Allergan, 2015). Actavis intends to change its name to Allergan, but, until the investor approval is obtained, it goes under the transitory name Actavis + Allergan. The combined brand portfolio includes franchises in the most important therapeutic areas, particularly, eye health, gastrointestinal system, central nervous system, infectious and cardiovascular diseases, urology and gynecology. It is expected that the company will generate $23 billion in sales the next year, having 30, 000 employees and a market capitalization of $128 billion (Chen, 2015). The particular benefits of this takeover are enhanced commercial opportunities, enriched brand pharmaceutical portfolio, reinforced R&D commitment and the marketing advantages of global leadership.

  • Allergan (2015). Actavis + Allergan. Retrieved from http://www.allergan.com/index.html
  • Chen, A. (2015, March 17). Actavis Completes Acquisition of Allergan. The Wall Street Journal. Retrieved from http://www.wsj.com/articles/actavis-completes-acquisition-of-allergan-1426602714
  • SEC (Securities and Exchange Commissions) (2014). Allergan 10-K. Retrieved from http://www.sec.gov/Archives/edgar/data/850693/000085069315000002/agn10-k2014.htm

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