Careers at Allergan
Allergan’s mission is to discover, develop, and commercialize innovative pharmaceuticals, biologics, and medical devices that enable people to live life to its greatest potential — to see more clearly, move more freely, express themselves more fully.
Allergan is a pharmaceutical company. The firm operates four reportable business segments:
- US Brands – Includes sales and expenses relating to branded products within the United States, including certain Botox therapies.
- US Medical Aesthetics – Includes sales and expenses relating to aesthetics and dermatology products within the United States, including certain Botox therapies.
- International Brands – Includes sales and expenses relating to products sold outside of the United States.
- Anda Distribution – Includes distribution of generic and branded pharmaceutical products manufactured by third parties, as well as by the company, primarily to independent pharmacies, pharmacy chains, pharmacy buying groups, and physicians’ offices.
Businessman Gavin Herbert, Sr. owned a set of drugstores in Los Angeles. In 1948 he launched a small ophthalmic business in the space above one of the stores. His colleague Stanley Bly developed its first product, an antihistamine eye drop called Allergan. The company was also given this name. Bly went on to create several more offerings, including Cortefrin, a cortisone eye drop.
The company performed well, but almost ground to a halt following a series of incidents. Bly suddenly died in 1953, leaving many of his product formulas undocumented. Fortunately, a professor named John Biles was able to reformulate them. The following year, Gavin Herbert, Sr. was in a car accident, causing a months-long hospitalization. His son took the reins of the firm to keep it going.
By the 1960s Allergan was generating over a million in sales annually. The decade saw a number of major milestones, including the launch of its first national product, a corticosteroid called Prednefrin; the unveiling of its first marketing campaign; and the introduction of Herplex, the first antiviral drug approved by the Food and Drug Administration (FDA) for consumer use in the United States.
In 1971 Allergan capitalized on its success by going public. In 1980 it was purchased by SmithKline Beckman Corporation and became private again. Allergan benefitted from SmithKline’s vast resources, which it used for R&D, and a decreased dependence on in-licensing. SmithKline benefitted by not having to be so reliant on a single product, the anti-ulcer drug Tagamet.
In 1989 SmithKline merged with Beecham Corporation, spinning off Allergan and making it public again. In the 1990s Allergan began focusing on specialty pharmaceuticals, acquiring the firm that created Botox; it became a hit product with $5 million in first year sales. In 2015 Allergan was bought by Actavis for $66 billion to prevent a hostile takeover. Actavis then changed its name to Allergan.
Business model of Allergan
Allergan has a mass market business model, with no significant differentiation between customer groups. The company targets its offerings at all consumers who seek pharmaceutical products.
Allergan offers five primary value propositions: accessibility, innovation, performance, risk reduction, and brand/status.
The company creates accessibility by providing a wide variety of options. Its products treat conditions in a broad range of categories, namely the central nervous system, ophthalmology, medical aesthetics, gastroenterology, women’s health, urology, cardiovascular, and anti-infective.
The company embraces innovation as part of its culture. It utilizes an “Open Science“ model in its research and development operations. A significant portion of its pipeline is sourced by partnering with academic institutions, biotechnology firms, and other pharmaceutical companies worldwide. This collaboration enables it to come with more cutting-edge solutions than it would otherwise.
The company has demonstrated strong performance through tangible results. Its 2016 R&D pipeline resulted in over 20 major pharmaceutical and device submissions and over 25 major pharma and device approvals. Also, it currently has over 70 programs in development across its seven therapeutic categories (identified above).
The company has reduced risks by maintaining high safety and security standards. It ensures compliance by constantly assessing and monitoring the output of existing quality systems and the application of evolving industry regulations and guidelines. For example, its auditing program confirms ongoing adherence to Good Manufacturing Practice (GMP) standards -- a regulatory guideline designed to ensure that finished products have the identity, quality, strength, and purity they are required to have. The program also ensures appropriate employee training and resource utilization. Allergan performs thorough safety monitoring and evaluations throughout the product lifecycle and identifies risks/benefits for consumers. Those who experience adverse events or have product complaints are encouraged to call a phone hotline to report them.
The company has established a powerful brand due to its success. It has commercial operations in 100 countries, with top five market share positions in almost 20 international markets. It has over 16,000 employees globally. Lastly, it produces a number of top, well-known brands, including Botox, Restasis, Latisse, Namenda, Linzess, Bystolic, Juveder, LoLoesterin,Teflaro, and Dalvance.
Allergan’s main channels are drug wholesalers, retailers and distributors (including national retail drug and food store chains), hospitals, clinics, mail order retailers, government agencies, and
managed healthcare providers such as health maintenance organizations and other institutions. It also distributes products through independent pharmacies, alternate care providers (hospitals, nursing homes and mail order pharmacies), physicians’ offices, and buying groups. The company promotes its offering through its social media pages, advertising, and participation in conferences.
Allergan’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. The company’s website provides prescribing and labeling information for distributors of its products. That said, there is a personal assistance component in the form of phone and e-mail support.
Allergan’s business model entails designing, developing, manufacturing, and commercializing pharmaceuticals, over-the-counter medicines, and biologic products for its customers.
Allergan’s key partners are the suppliers that provide it with the raw materials (e.g., active and inactive pharmaceutical ingredients) it needs to make its products. It receives a large percentage of these materials from foreign suppliers. It seeks partners that will actively take part in its business, and help improve its processes by increasing efficiency and suggesting ways to decrease costs.
Beyond suppliers, its major partners include the distributors of its products (wholesalers, retailers, healthcare facilities, etc.) and its research partners (academica, biotech and pharma firms, etc.)
Allergan’s main resources are its human resources, who include the scientists and engineers that design, develop, and manufacture its products. Its important physical resources are its manufacturing facilities located worldwide. Lastly, it places a high priority on its intellectual property, with its highly-recognized trademarks and brands important to its business.
Allergan has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is sales/marketing expenses, a fixed cost. Other major drivers are cost of sales, a variable expense, and administration, a fixed cost.
Allergan has two revenue streams: revenues it generates from sales of its products to its customers and revenues it generates from licensing fees.
info: Brenton L. Saunders earned a Bachelor’s degree at the University of Pittsburgh and an MBA and JD at Temple University. He previously served as President and CEO of Forest Laboratories, as CEO of Bausch + Lomb, and as a Partner at PwC.
info: Robert Stewart earned B.S. degrees in Business Management/Finance at Fairleigh Dickinson University. He previously served as President, Generics and Global Operations at Allergan and as Chief Operating Officer of Actavis.
info: William Meury earned a B.S. in Economics at the University of Maryland. He previously served as President, Branded Pharma at Allergan, as Executive VP, Commercial, North American Brands atActavis, and as EVP, Sales and Marketing at Forest Labs.
info: Maria Teresa Hilado earned a B.S. in Management Engineering at Ateneo de Manila Univeristy and an MBA at the University of Virginia. He previously served as Senior VP, Finance and Treasurer at PepsiCo and as VP and Treasurer at Schering-Plough Corporation.
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