Allergan puts women's health, infectious disease units on the block

allergan irvine
Allergan began its strategic review in March. (Allergan)

Allergan is apparently ready to take some analysts’ advice.

The Dublin drugmaker has wrapped up its strategic review and has kicked off sales processes to divest its women’s health and infectious disease units, CEO Brent Saunders said Wednesday at an analyst conference. With those businesses out of the picture, the company will double down on medical aesthetics, CNS, eye care and GI, four areas where it believes it has the biggest competitive advantages. 

"The strategic plan allows Allergan to focus our resources on the strongest growth drivers of our business, and I believe it will accelerate value creation for shareholders," Saunders said, according to an Allergan spokeswoman.

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Allergan, whose shares are bottom-feeding in part on competitive threats to key sellers Botox and Restasis, is looking for a way to turn things around. CEO Brent Saunders initially rejected the idea of asset sales, but after a 1,400 jobs cut did little to improve investor sentiment, the company undertook a strategic review in March.

Some analysts have been beating the asset-sale drum for months—in particular, RBC Capital Markets’ Randall Stanicky, who in the past has tabbed both Allergan’s women’s health and anti-infectives businesses “non-core.” Last November, he wrote to clients that he was “not convinced” of the benefits of settling products in those areas alongside Allergan’s growth products in the aesthetics field, chalking up the unconventional product lineup to Allergan’s long history of M&A moves.

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“If AGN were establishing a new platform today, it is hard to imagine this would be the ‘ideal’ asset mix it would pursue,” he said at the time.

The way Stanicky sees it, women’s health alone could bring in up to $6 billion in sale proceeds—a sum Allergan could use to pay down debt and buy back shares, moves that would likely cheer investors. In the last 12 months, they’ve sunk Allergan’s shares by 32%, CNBC notes.

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