US pharma group Forest considering HQ move to Ireland

Chief executive Brent Saunders insists the move would not be only for tax reasons

Forest Laboratories: Brent Saunders, the new chief executive, said he would consider reversing the US pharma group in an Irish company in line with deals by other pharmaceutical companies. Photograph: Jim Peppler/Newsday

Forest Laboratories: Brent Saunders, the new chief executive, said he would consider reversing the US pharma group in an Irish company in line with deals by other pharmaceutical companies. Photograph: Jim Peppler/Newsday

 

The new chief executive of Forest Laboratories would consider reversing the US pharma group in an Irish company in line with deals by other pharmaceutical companies, while stressing he would not do so only for tax reasons.

However, Brent Saunders said he saw no need to expand Forest’s geographical footprint, which is focused on sales in the US. He stressed that the focus on North America was an advantage in its efforts to license products from family- and foundation-owned pharmaceutical developers in Europe such as Lundbeck and Pierre Fabre.

Forest Labs was one of a number of potential suitors rumoured to be interested in acquiring Elan when it was put on the market by its management this year. The company never publicly expressed an interest, and Elan was acquired by another US business – generics and over-the-counter medicines group Perrigo.

Forest employs more than 320 people in Ireland and makes two blockbuster drugs here: antidepressant Lex- apro, which went off patent last year, and Alzheimer’s therapy Namenda, which is due to face patent expiry in 2015.

Mr Saunders made his comments in an interview with the Financial Times. He also disclosed he was considering a multibillion-dollar spending spree as he looks to strengthen the group’s portfolio of treatments.

He said he was actively seeking deals including licences to commercialise experimental and approved medicines in cardiovascular, gastrointestinal, respiratory and hospital infectious disease treatments.

His aim is to have several drugs for each therapy area, strengthening the appeal to doctors and staggering the company’s exposure to patent expiries while giving a critical mass of annual sales in excess of $1 billion (€730 million) for each division. “My goal is to have blockbuster calls in each of those sectors,” he said.

“Doctors would rather talk to a rep with three or four relevant products.”

Mr Saunders is seeking to make his mark after taking over in the autumn from Howard Solomon, who ran Forest for more than 15 years. He has already launched a bond issue, shaken up senior management and unveiled “Project Rejuvenate” with the aim of cutting 9 per cent of the 5,500-strong workforce.

“We are on the move, and have become a very different company in a very short period of time,” said Mr Saunders.

He said he had plans to strip out three layers of management, reducing the corporate hierarchy to seven levels.

The moves follow a period of uncertainty over Forest’s future, with sales under pressure and a campaign for reform led by shareholder Carl Icahn. – (Copyright The Financial Times Limited 2013)