Forest Labs' Saunders to Head Actavis After Deal

Actavis PLC named Forest Laboratories Inc. Chief Executive Brent Saunders to lead the combined company once Actavis' $25 billion takeover of Forest is complete.

The appointment comes as a surprise as current Actavis CEO Paul Bisaro had told analysts in February he had intended to remain at the helm of the combined company. Instead, he will become executive chairman.

With the acquisition of Forest, Dublin-based Actavis is adding a rival drug maker almost as big as itself. The deal is expected to bring with it tax savings, benefits that come with an increased size and an improved product mix.

The acquisition of Forest by Actavis marks the second time in about a year that Mr. Saunders--who has been Forest CEO since September--has flipped a company shortly after taking the helm. Just four months earlier, Mr. Saunders had engineered the sale of Bausch + Lomb for $8.7 billion to Valeant Pharmaceuticals International Inc.

He was previously chief compliance officer at Schering-Plough and was a protégé of Fred Hassan, who had run two large drug makers -- Pharmacia and, later, Schering.

Mr. Saunders was later placed in charge of the consumer health-care business and then oversaw the integration with Merck after the $41 billion deal was announced in 2009. Once that deal closed, he quickly landed the role of chief executive at Bausch + Lomb, where Mr. Hassan had become chairman.

As CEO of Actavis, Mr. Saunders will have responsibility for leading the company's approximately $15 billion global pharmaceutical business.

Robert Stewart, president of Actavis global operations, will become chief operating officer.

"These appointments reflect the increased size and complexity of the combined business, and the exceptional and complementary expertise of the Actavis and Forest management teams, " Mr. Bisaro said in a prepared statement.

Actavis also is aiming to cut $500 million in costs by 2016 and mesh its generic product portfolio with the brand-name drugs sold by Forest.

A rapidly changing U.S. health-care system provides the backdrop for the scramble among industry players to consolidate. Health-care providers and insurers have been joining forces to increase their bargaining power with drug makers. Generic drug makers also have been looking for ways to increase their scale and protect their profits amid intense price competition.

Ed Silverman contributed to this article.

Write to Tess Stynes at [e-mail]

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