Allergan Says Not Focused on ‘Big M&A’ as Sales Fall Shortby
Second-quarter revenue lower than analysts anticipated
Allergan CEO says not focused on or looking at large deals
Allergan Plc isn’t looking at any large deals, Chief Executive Officer Brent Saunders said, after the drugmaker posted second-quarter sales that fell short of analysts’ estimates.
Revenue at Allergan, which ended its $160 billion planned merger with Pfizer Inc. in April, rose 1.5 percent to $3.68 billion last quarter. That was shy of the $3.72 billion average of estimates compiled by Bloomberg. While sales of the blockbuster wrinkle treatment Botox soared, revenue from Allergan’s Alzheimer drug Namenda IR slumped 98 percent after the loss of patent exclusivity.
“Allergan doesn’t need to do any big M&A,” Saunders said Monday on a conference call about quarterly results. “We have a strong pipeline, many of which are late-stage and game-changing potential programs.”
Allergan’s stock dropped 3.2 percent to $245.75 at 1:44 p.m. in New York. The shares of Biogen Inc., which the Wall Street Journal reported last week was among potential takeover targets for Allergan, dropped 0.9 percent to $313.04, after rising earlier in the morning.
Saunders’ remarks confirmed a change of approach to M&A following the collapse of the Pfizer deal in April in the face of regulatory hurdles. Saunders, who has been one of the most active dealmakers in the industry, signaled in June that he was hunting for smaller “tuck-in deals” that fit its existing lines of business to boost growth. Allergan, which is based in Dublin but has executive offices in New Jersey, completed the $40.5 billion sale of its generic drugs business to Teva Pharmaceutical Industries Ltd. last week.
Other highlights from the financial statement:
- Allergan predicts 2016 earnings per share of $13.75 to $14.20. Analysts anticipated $13.94.
- Second-quarter Botox sales of $719.7 million, beating the average estimate of $699.5 million.
- Eye medication Restasis sales at $390.6 million, versus prediction of $346 million
- Quarterly net loss widens to $501.7 million, or $1.44 a share, from a loss of $243.1 million, or 80 cents a share, a year earlier.