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


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Allergan posted better-than-expected third quarter earnings of $1.78 per share, surpassing the Zacks Consensus Estimate of $1.76. While earnings climbed 44.7% year over year, revenues increased 16.6% to $1,817.1 million, above the Zacks Consensus Estimate of $1,770 million. Allergan upped its 2014 earnings per share guidance again to $6.27 $6.30. Allergan's restructuring plans, which involve cutting its workforce by 13% and reducing R&D and other expenditure, will aid the bottom line. Meanwhile, in Nov 2014, Allergan agreed to be acquired by Actavis in a cash and stock transaction valued at about $66 billion or $219 per share. With the acquisition slated to close in the second quarter of 2015, we maintain a Neutral recommendation on the stock.


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.

In Nov 2014, Allergan agreed to be acquired by Actavis in a cash and stock transaction ($129.22 in cash and 0.3683 Actavis shares for each share of Allergan common stock) valued at about $66 billion or $219 per share. Brent Saunders, Actavis' CEO and President, will lead the combined company. The acquisition is slated to close in the second quarter of 2015.

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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 Nasdaq, Inc.

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