After investor attacks, Allergan's reviewing 'all options'—and this time it's urgent, CEO says

Allergan Chairman and CEO Brent Saunders gets to keep both his titles, thanks to a shareholder vote that broke in his favor. But he answered critics Tuesday with a promise that Allergan's weighing all its options now—including a split—with a "sense of urgency."

Saunders made that pledge as Allergan reported first-quarter results—including a painful $2.5 billion write-down on its failed antidepressant rapastinel—and after meetings with more than 50 investors over the past few months, the CEO said.

Even after shareholders last week voted against separating the company's CEO and chairman jobs, the helmsman said his company has heard investor concerns “loud and clear.” 

Some analysts have been calling for a split for years as Allergan's shares have faltered, and the company did put a couple of its business units on the market, if unsuccessfully. But until recently, the idea was a non-starter. And now? It’s considering just that, along with a range of other options to boost shareholder value. “Everything is on the table,” Saunders said.

“I’ve always remained open-minded, and the board remains open-minded, to that idea if it’s something that creates long-term value,” Saunders said. 

Before pulling the trigger on a split, Allergan would consider its financial benefits, the size of the R&D operations within its various units, and its scale outside of the U.S., which is improving, Saunders said. He declined to put a timeline on the decision but told analysts to “stay tuned” multiple times.

Saunders' commentary came after Allergan reported first-quarter sales of $3.6 billion that beat analyst estimates of $3.54 billion. The company turned in $3.79 in non-GAAP earnings per share, beating estimates of $3.55, and raised its sales and earnings forecasts for the year.

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But on the GAAP side of the ledger, earnings turned to a loss. Allergan took a $2.47 billion write-down on its antidepressant rapastinel, whose late-stage trial failure sent shares reeling.

The write-down follows numerous other missteps and a long slide for its stock. Allergan shares have fallen more than 55% from their levels in the summer of 2015.

So it's no surprise investors have been angry. Earlier this year, activist investor David Tepper reignited his campaign to push for a split-up of Saunders’ CEO and chairman jobs, saying an independent chairman would benefit the company’s decision-making.

Allergan shareholders rejected the proposal in a vote last week and Saunders said Tuesday he takes “seriously the opinion of all of our shareholders, including David Tepper.” Saunders said he shares their frustrations and that he has a significant financial stake in the drugmaker, as well. 

While Allergan evaluates its options, the company is focused on executing in its core areas, Saunders stressed. The company expects several launches in the next 18 months, including Vraylar in bipolar depression, abicipar in neovascular macular degeneration and its oral CGRP migraine prevention med ubrogepant.