Allergan may have a reputation as a serial buyer, but it’s not looking for any big deals, CEO Brent Saunders insisted on Monday. And that assurance could quiet the rumors that the company is eyeing a Biogen buy.
As Saunders pointed out on Allergan’s Q2 conference call, the company has been focused on so-called “stepping stone” deals, and that’s what it’s looking at now.
Allergan’s recently canceled Pfizer megamerger notwithstanding, “It’s not like it’s a new strategy, despite our image ... in the market,” he said.
That was a “once in a corporate lifetime situation,” Saunders insisted. These days, “we’re not looking for big M&A,” he said, though “while the odds of something compelling become clear are exceptionally low,” they’re “not zero,” he pointed out.
Meanwhile, in the wake of Allergan’s just-closed deal to send its generics unit off to Teva--and another recent pact that’ll transfer its generics distribution business to the Israeli drugmaker, too--Teva’s base business “looks good,” Evercore ISI analyst Umer Raffat wrote in a note to clients. Key products Botox and Restasis netted $719.7 million and $390.6 million in quarterly sales, respectively, with their year-over-year growth offsetting a $38.2 million decline for now-off-patent Alzheimer’s med Namenda.
Overall, the heavy hitters led revenue to $3.68 billion--and while that figure fell short of the $4.08 billion consensus mark, that consensus hadn’t been updated for the generics distribution sale, Raffat pointed out. Allergan put up a net loss of $1.44 per share, which has widened since the company posted a loss of 80 cents in the year-ago period.
Allergan’s full-year guidance suffered on the distribution deal, too; while the business primarily supported the company’s former generics unit, branded revenues took a $100 million hit, leading the Dublin drugmaker to revise its sales guidance downward. It now expects between $14.75 billion and $15 billion for the year, as opposed to the $15 billion it previously forecast.
- read Allergan's release
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