Allergan Gets on the GSK Merry-Go-Round for a Second Time

(MoneyWatch)  Shares of Allergan have risen in the last few days on the rumor that GlaxoSmithKline may be interested in buying the company. BNET discussed this scenario back in March. Do the Q2 2009 results for both companies help clarify the case, for or against, such a deal?

Certainly, GSK's situation looks more desperate than it did in Q1, especially when you see this chart of expected revenue losses from generic competition.

As for Allergan, the double-whammy of recession and competition from Medicis' version of Botox, Dysport, depressed its revenues by 3.2 percent. (Just to prove the point, Medicis' revenues were up 3 percent to $141 million.) Thirty percent of Allergan's sales are Botox -- that's what's at stake.

So the situation for both companies is deteriorating, but at a slower pace for Allergan than for GSK.

Ancient history: Combining these two companies would bring them both full circle for a second time. The Orange County Business Journal notes that GSK's predecessor, SmithKline Beecham, acquired Allergan in the 1980s and then spun it off again.

• Previous stories about Allergan:
• Allergan Q2: How Much Does a DOJ Subpoena Cost? $7.4M
• The Sanofi-Allergan-Amgen Deal Worst-Case Scenario
• Could Allergan's Reliance on Stars Hurt It in War With Medicis?
• Allergan's Q1 Nightmare: Profit Down; Black Box Warning on Botox Vindicates an Old Nemesis; "It's All Medicis' Fault!"
• Allergan Could Lose a Third of Botox Market With FDA's Approval of Medicis' Dysport
• The GlaxoSmithKline-Allergan Deal Worst-Case Scenario
• Previous stories about GSK:
• GSK Q2: Generics Wreak Havoc; Cost Reductions From Layoffs Spent on Advertising
• The FDA Gives GSK a New Way to Tout Alli
• GSK Wins Full Review of Tafas v. Doll, Wonky-But-Crucial Patent Case
• GSK's Alli Shows Future for Vivus, Arena and Orexigen's Obesity Candidates
• Why Abbott Is Allowed to Manipulate GSK and BMS's AIDS Drug Prices
• Sanofi, GSK Make Novartis Look Scrooge-Like on Swine Flu Vaccine Donations
• GSK Q1: ?£450 Million in Generic Damage to CNS Category