The future looks bright: OT's Emily McCormick meets a man who Harvard Business Review named in its global top 100 best-performing CEOs list, Allergan's David Pyott.
Like Johnson & Johnson, Allergan has its fingers in a number of different sectors, including Botox, breast and facial aesthetics, skincare and obesity intervention. However, ophthalmology remains its biggest focus, accounting for 47% of its portfolio.
"Today almost half of our market is ophthalmology and then we have a mix of other businesses as well," Mr Pyott says. "I think the best way to look at Allergan is really as a series of vertical businesses with a very clear strategy that has existed for nearly 60 years," he explains.
Celebrating its 60th anniversary during the annual five-day conference, the CEO has flown over from his California headquarters to talk on everything Allergan, from how it was founded and has grown to become the second largest ophthalmology company (Alcon is the biggest Mr Pyott tells me), to financial figures and new products.
By his own remarks Mr Pyott is an unusual American CEO because he is in fact Scottish. Since joining in 1997--as the company's third CEO in its history--he has helped Allergan grow from a $2bn to an $18bn globe business.
Under his watch Allergan has enjoyed an average sales increase of 18% year-on-year. But Mr Pyott doesn't disguise that there have been a few bumps along the way.
Not immune to the recession which initially hit businesses in 2008, the company recorded a substantial drop in growth that year--sales were up 26% in 2007 before falling to 11% in 2008 and 5% in 2009. However, unfazed by the drop, Mr Pyott reveals that he has nearly steered the company back on track: "In 2009, unlike most companies we continued to grow by about 5%, and already at the start of this year we are seeing a real recovery in our market, moving back to double digits in many businesses."
Mr Pyott goes on to admit that he expects the company's finances to show near double figure growth once again by the close of 2010. "It [growth] is probably going to be somewhere in the 7-10% range." And it's not only the financial statistics that prove Allergan has been successfully riding the recession: "We have been hiring heavily despite the recession with employee numbers currently at around 8,500," Mr Pyott comments.
Seen as a strong CEO by those looking into the company, Mr Pyott could perhaps be misinterpreted as a 'bad guy' by some of those on the inside looking out. In his 13 years at the company he has played a pivotal part in the closure of several manufacturing plants. He tells me: "In fact, we only have six manufacturing plants is the world so my job has always been shutting down manufacturing facilities.
"My view is that yon can get anything to anywhere with Air Freight in about 30 hours around the world."
Despite these closures Mr Pyott admits that one area he refuses to skimp on is research and development, with any cut back benefits being ploughed into the area. "If there's one thing that I'm proud of for the Allergan team it's that when I joined the company at the end of 1997 the R&D budget was 100m [euro]; this year in fact it will be closer to 750m [euro].
"So given all this investment in R&D gives you the reason to why we have a very strong pipeline."
This year Allergan has already had Lumigan 0.01%, a drug which lowers intraocular pressure (IOP), approved, and at the end of May received a positive response from the European Committee for Medical Products for Human Use on its latest product, Oznrdex, with a formal license expected by the end of the month.
Looking to the future, next year Allergan will have more patients on glaucoma trials than at any point in the company's history, with seven clinical programmes planned. "What that says is that Allergan will have many new innovative glaucoma products five to ten years from now," he says.
"We are also working on the next generation of tears and the next generation technologies for the retina."
Before leaving I ask Mr Pyott where he sees Allergan being in another 60 years and he responds: "Of course [taking over Alcon to become the largest ophthalmology company] that's the goal."
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|Date:||Jul 2, 2010|
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