Why is FRX different than other drug companies? He tells you.
What drives the company's decisions? He tells you.
How will value be created for shareholders? He tells you.
Read it. It is a rare shareholder letter; one that is worth your time.
OK... I can't help it. Here is one particularly good quote regarding the motivation of many company leaders.
"And that lust for size, the playground of so many executives, and the emoluments of size, which has so often characterized industry in the United States and all over the world, is a significant cause of the worldwide economic disaster we are currently suffering: banks, investment firms, corporations, expanding into uncontrollable dimensions and not knowing what they are acquiring in their expansion; mergers and acquisitions resulting in bloated payrolls and factories and geography. And with it, the misplaced assumptions that management, motivation, competence and employee commitment and performance, on which real value ultimately depends, would just happen as a result of greater and greater size.Solomon won't win any awards for syntax, but he's setting the right tone at Forest Labs. The contrast between Forest and its peers could not be clearer. If only more investors realized it.
In fact, in so many cases just the opposite is true. That kind of growth, that is too rapid, often based on mergers and acquisitions with their inevitable dilution and operational disruption and internal rivalries, and rapid operational expansion at a rate that can't be managed, and all of it often depending on accumulated debt, and overvalued, sometimes grossly overvalued, goodwill which sooner or later has to be adjusted, rarely ultimately benefits either employees or shareholders."
My assumptions about this company are anything but misplaced.