What will Allergan look like after it hives off its generics unit to Teva Pharmaceutical Industries? The company unveiled some new numbers on that score Monday. And while Allergan's status as a potential top 10 pharma company proved short-lived, it's still looking for a growth rate that outpaces its Big Pharma peers.
Backing out those generics sales, the second half of the year is expected to fall short of analyst estimates, sales-wise, but only a bit. Allergan ($AGN) now predicts revenue of $8 billion-plus, with some analysts looking for as much as $8.5 billion without the generics' contribution.
For comparison's sake, the company's Q2 sales came in at $5.76 billion, and at that rate, its second half would have come in at more than $11 billion, and with full-year expectations of $20 billion-plus, Allergan was set to join the ranks of the pharma top 10.
|Allergan CEO Brent Saunders|
That's not going to happen without the generics revenue, or at least not yet. But even now that it's refocusing on branded meds, rather than the hybrid business model CEO Brent Saunders talked up earlier this year, Allergan still expects to deliver 10% growth going forward.
As for profits, Allergan is now looking for earnings per share at $6.25 to $6.55 for the year, an improvement over some analysts' forecasts, but a bit short of others.
Leerink Partners analyst Jason Gerberry said he's trimming his revenue forecast to $8.1 billion from $8.5 billion, partly because newly-generic Namenda has taken about 40% of that franchise's sales. The company has been working to convert patients to its newer extended release formula, Namenda XR, and pushing its new combo drug Namzaric, with solid success.
"Heading into 2016, we believe Allergan has a favorable setup with several product launches that could outpace expectations," Gerberry wrote in an investor note, singling out the double-chin drug Kybella, which Allergan acquired in its Kythera buyout, and Viberzi, a bowel med that is going head to head with Valeant Pharmaceuticals' Xifaxan.
Then there's the prospect of M&A, fueled by the billions in cash Allergan will have to hand after the Teva closing. Saunders has said a major deal would be possible after that point.
- see the Allergan release
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Editor's note: This article was updated to clarify analysts' estimates for Allergan's second-half revenue, without generics sales.