Allergan CFO Tessa Hilado says she has done what she promised for Allergan and so now intends to retire. But the timing of her departure comes at a tricky time for the pharma, which has seen its shares fall in the face of its legal battle over Restasis patents and its out-of-left-field deal with a Mohawk tribe to shield them.
The company said today that Hilado, who came to Allergan three years ago, is retiring but agreed to stay on until her replacement is named.
Hilado, who came to the company with decades of finance experience, oversaw the company’s transformative deal to buy Allergan and its subsequent $40.5 billion sale of its generics business to Teva, CEO Brent Saunders pointed out.
But news of the departure comes at an awkward time for the company. Two weeks ago Allergan caught investors by surprise with its announcement that it had transferred key Restasis intellectual property to the Saint Regis Mohawk Tribe. It claimed the maneuver would protect the patents from inter partes review challenges at the U.S. patent office because as a sovereign nation the tribe can claim immunity. Allergan was already battling generic companies in court over patent protection for Restasis, which is Allergan’s second-best selling drug with sales of about $1.5 billion last year.
But instead of instilling confidence, Allergan has seen its shares fall on news of the deal with the tribe and the immediate blowback that erupted.
On top of that, there have some pipeline setbacks, like Friday’s announcement that the FDA had delivered it a Refusal to File for its application to extend the use of antipsychotic drug Vraylar. That caught Wells Fargo analyst David Maris by surprise, given that Allergan just weeks ago touted the indication as as a potential growth driver without any mention that the FDA might have concerns, he told clients in a note today.
“The last few weeks have been challenging for AGN shares and we believe this news, which while only likely a minor negative by itself, only adds to already negative sentiment,” Maris wrote.
But to Bernstein analyst Ronny Gal told investors the timing of Allergan's use of cash is "excellent," and that Hilado's departure, given that it was a personal decision to retire, shouldn't be a negative. He told he sees the company poised for a rebound.
Allergan offered up some reassurance to investors today with the announcement of a new $2 billion share buyout program and a couple of affirmations. It reaffirmed guidance of for Q3 and the year, and then affirmed its commitment to its investment-grade credit ratings and debt paydown strategy. That came right before it announced it was losing its CFO.