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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