How Can Allergan Benefit from the Teva–Allergan Deal

How Can Allergan Benefit from the Teva–Allergan Deal

Contents

1. Introduction 2

2. What is a business model? 2

3. Allergan business model analysis 3

3.1 Five major deals 3

3.2 Deal with TEVA 3

3.3 Strength and limits of Allergan business model 4

3.4 Allergan financials 5

4. Sustainability of Allergan business model 7

5. Conclusion 8

References 9

1. Introduction

Allergan, formally known as Actavis or maybe called “Pfallergan” next year, is a growing pharmaceutical monster via numerous M&A activities. In this decade, people are astonished by the continuous mega deals in the pharmaceutical industry, both by the volume of trade and the wide range of participants. Allergan, as for a “shining star” in this boom, is widely discussed for digging out the reasons behind these deals and forecasting the future patterns. This article will focus on the Allergan’s divestment of generic business to TEVA, judging the sustainability of business model by analysing the financial outcome and influences of this transaction.

2. What is a business model?

The term of business model emerged in the year of 1975 and then became flourished in the mid-1990s. At that period, the whole world underwent a series of cultural changes and was called the “Digital Economy” (Feng et al., 2001), and “business model” became a buzzword after the booming of this digital economy. More intuitively, Ghaziani and Ventresca (2005) illustrated that the uses of “business model” as a keyword in public talking were 166 times between 1975-1994, and surging to 1563 from 1995 to 2000.

Business model becomes widely spread and more important in the enterprise world, but what is exactly the definition of it? Michael Lewis (2000) described business model as “a term of art”. Lewis gave us a high-level overview of the business model, which seems can define every single thing in a company. Regarding the definition of “art” made by Michael Lewis, Andrea Ovans (2015) explained, “like art...