Allergan plc’s AGN second quarter 2015 earnings came in at $4.41 per share, in-line with the Zacks Consensus Estimate but 29% above the year-ago period.
Revenues for the reported quarter came in at $5.76 billion, up 116% from the year-ago period, but just shy of the Zacks Consensus Estimate of $5.79 billion.
Quarterly Details
Branded products revenues soared to $3.712 billion (up significantly from $636.9 million in the year-ago period), driven by the Allergan, Inc. and Forest acquisitions and the performance of legacy products like Lo Loestrin ($79.2 million) and Estrace Cream ($70.1 million). Products like Botox and Restasis brought in sales of $631.5 million and $325 million, respectively, with Botox seeing strong growth in both the aesthetic and therapeutic settings and Restasis benefiting from a DTC campaign and its launch in the primary care marketplace.
While Namenda IR sales were $232.6 million, Namenda XR sales came in at $204.7 million. The company started facing generic competition for Namenda IR from July.
Allergan has also made significant progress with its pipeline and has more than 70 candidates in mid-to-late stage development across seven therapeutic areas including biosimilars. Some of the pipeline candidates include cariprazine (bipolar I disorder, FDA action date: Sep 2015), DARPin (age-related macular degeneration – phase III; diabetic macular edema, phase II studies ongoing), bimataprost SR (phase III – glaucoma), SER 120 (treatment of nocturia, phase III data under review) and biosimilar Avastin (phase III data in the third quarter). The company is also working on expanding the labels of marketed products like Botox, Linzess, Restasis and Teflaro among others.
Total generic product revenues declined 1.4% from the year-ago period to $1.58 billion. Allergan has signed up with Teva Pharmaceutical Industries Ltd. TEVA for the divestment of its generics business for $40.5 billion. The deal is slated to go through in the first quarter of 2016.
Anda revenues increased 8.3% during the quarter to $462.4 million.
Our Take
We remain optimistic about Allergan’s growth prospects. We are positive on the Forest acquisition which is in line with Allergan’s strategy of building its branded product portfolio. Meanwhile, the Durata acquisition has boosted Allergan’s infectious disease portfolio. The Allergan Inc. acquisition also looks good to us. We are encouraged by Allergan’s focus on building its branded and biosimilars pipeline and the decision to divest the generics business should allow the company to focus on its target areas.
Allergan is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the health care sector include Dr. Reddy's Laboratories Ltd. RDY and Gilead Sciences, Inc. GILD. Both are Zacks Rank #1 (Strong Buy) stocks.
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