Allergan gets a lift from assessment that threat to Botox is overblown

Allergan has been facing a lot of criticism of late, what with a sagging share price, pressure for a breakup and blowback on a maneuver to protect eye drug Restasis from generics. But it has gotten a little love from analysts at Morgan Stanley which raised their outlook for the drugmaker.

In a note to investors today, Morgan Stanley analysts said they believe that the downside from these "negatives have largely been priced into," Allergan's stock and presenting some upside.  It also said, that some investors have overstated the threat to Allergan’s Botox from a similar drug from Revance Therapeutics.  

"Fears about a 'better Botox' may be overdone," analyst David Risinger said in the note. He explained it will be hard for Revance Therapeutics, which is developing a botulinum toxin to fight things like frown lines, to show its product is superior.

After Morgan Stanley upgraded Allergan's stock to overweight from equal weight, Allergan’s stock price was up about 4%.

That was a nice surprise given that its shares have been on a steady slide since July, down about 30%,  as the Dublin drugmaker has dealt with a series of difficulties. A federal judge invalidated patent protections on its second-best seller, Restasis. In the weeks before that, it faced blowback from lawmakers for a patent licensing agreement it had struck with the Saint Regis Mohawk Tribe to shield those same patents from an inter partes challenge at the U.S. Patent and Trademark Office.

RELATED: Cost cuts are coming for Allergan, CEO says. But a breakup isn’t

With its shares suffering, some analysts have been pressuring the company to split itself up, a move CEO Brent Saunders recently said he was not interested in making. During the third-quarter call earlier this month, Saunders said he doesn’t see the patent loss as a reason to take such a drastic step. Instead, Saunders said Allergan will cut costs and soon.

“We’re not the first nor will we be the last biopharmaceutical company to have to deal with loss of exclusivities on products. That in and of itself is not a reason to change course,” Saunders said.