Stick A Fork In Allergan

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Allergan CEO Brent Saunders. Source: Business Insider

Allergan (AGN) is one of the most talked about names in the pharmaceutical industry. The company, along with names like Bausch Health (NYSE:BHC) and Teva (TEVA), has defined the past decade where pharmaceutical companies acquired other brands at the height of the market and then raised drug prices to (1) justify overpaying for target companies and (2) help service high debt loads.

Allergan has been particularly litigious when protecting its branded products from generic competition. In Q3 2017 the company sold its Restasis (dry eye) to the St. Regis Mohawk Tribe to protect it from generic competitors like Mylan (MYL) and Teva. Nearly two years later, Allergan is still tying Mylan and Teva up in court and thwarting their attempts to bring generic Restasis to market. However, the company’s growth is starting to show cracks.

The company reported Q4 2018 revenue of about $4.1 billion, down 6% Y/Y. The double-digit growth of the past appears to be over. Revenue from every segment fell by single-digits. Even Allergan’s vaunted U.S. Specialized Therapeutics segment fell off. The biggest hit came from Restasis, whose revenue fell 18%. Restasis represents 18% of the Specialty Therapeutics segment and about 8% of total revenue. It has been hit in Canada by a generic version from Teva. The decline could imply that Takeda’s (OTCPK:TKPHF) Xiidra is taking share from Teva in the Medicaid and Medicare markets. Another hit came from breast implants, whose revenue fell about 1%. Read more:

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