Allergan, Inc. (AGN): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Allergan posted better-than-expected second quarter earnings of $1.51 per share, surpassing the Zacks Consensus Estimate of $1.44. While earnings climbed 23.8% year over year, revenues increased 16.1% to $1,854.5 million, above the Zacks Consensus Estimate of $1,720 million. Allergan upped its 2014 EPS guidance again to $6.20 $6.25. Over the next five years, Allergan expects double-digit sales growth and compounded annual earnings growth of more than 20%. Allergan's restructuring plans, which involve cutting its workforce by 13% and reducing R&D and other expenditure, will aid the bottom line. While we remain optimistic about Allergan's growth prospects, we are moving back to a Neutral recommendation as we believe the current share price reflects the positive factors. We expect near-term investor focus to remain on Valeant's efforts to acquire Allergan.

Overview:

Headquartered in Irvine, CA, Allergan, Inc., a global multi-specialty pharmaceutical company, develops and commercializes innovative products for eye care, neurological, medical aesthetics, medical dermatology, breast aesthetics, urological and other specialty markets. In addition to its discovery-to-development research programs, Allergan has global marketing and sales capabilities in over 100 countries.

The company operates through two business segments: specialty pharmaceuticals and medical devices. While the specialty pharmaceuticals segment includes ophthalmic, skin care as well as other prescription and over-the-counter dermatological products, Botox and urologics products, the medical devices segment includes breast implantation and dermal fillers.

The medical devices segment was created through the company's Mar 2006 acquisition of global healthcare company Inamed Corporation. The specialty pharmaceuticals segment contributed about 84.7% to total revenues in 2013, with sales coming in at $5.3 billion. Botox, a key product in this segment, posted sales of $1.98 billion in 2013. Sales from the medical devices segment came in at $858.5 million in 2013.

In Dec 2013, Allergan sold its obesity intervention business which had been performing badly over the past few years.

In Dec 2012, the company bought a privately held company, SkinMedica, Inc. to acquire the latter's topical aesthetics skin care business. In Mar 2013, Allergan acquired Map Pharmaceuticals, which is now a wholly owned subsidiary of Allergan.

Allergan is currently being pursued by Valeant which is looking to acquire the company for a combination of 0.83 of Valeant common shares and $72 in cash per share.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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