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Allergan CEO, fresh off one deal, sets sights on others

July 27, 2015 11:52 AM EDT

NEW YORK (Reuters) - Allergan CEO Brent Saunders said on Monday the company will use the $36 billion it nets from the sale of its generics business to Teva for more deals, including large, "transformational" merger opportunities.

Saunders, who led the $66 billion combination of Actavis and Allergan that closed only a few months ago, told investors that it would use the proceeds from its $40.5 billion sale to Teva to increase the size of existing drug businesses, expand into new therapy areas, and pursue larger deals.

"We can accelerate our timing on transformational M&A," Saunders said during the conference call, describing the sale to Teva as "reloading" its balance sheet.

The cash-and-stock sale to Teva is expected to close in the first quarter of 2016.

When asked if Allergan planned to spend the cash within 18 months, Saunders replied that the company would, as long as it could maintain its investment grade rating.

He said that of the seven main therapeutic areas that Allergan will focus on after the generics sale, there are four with the strongest opportunities in terms of unmet medical care: aesthetics, eye care, central nervous system therapies and gastrointestinal therapies.

Saunders declined to give information about any specific deals he might be considering.

Wall Street analysts were already speculating on what deal Allergan might turn to next.

A poll conducted by Evercore ISI this weekend asked investors which companies would make good targets or combinations with Allergan. At the top of the list was Biogen Inc, Abbvie Inc and Pfizer Inc, Biomarin and Vertex.

(Reporting by Caroline Humer; Editing by Nick Zieminski)



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