Allergan Realigns Executive Team, Outlines $10 Billion Stock Buyback
10 Mai 2016 - 2:10PM
Dow Jones News
Allergan PLC announced plans Tuesday to streamline its executive
team under Chief Executive Brent Saunders and buy back up to $10
billion in stock as the drugmaker reported sales that fell short of
analysts' expectations.
Wall Street should read the share repurchases as a signal that
Allergan won't pursue the kinds of big deals, such as the $70.5
billion transaction with Actavis PLC in March 2015, that the
company had become known for lately.
"When we look at the universe of things to buy, we don't see
anything that is a better investment than our own equity," Mr.
Saunders said in an interview.
Allergan will instead focus, he said, on managing its current
portfolio of products, realizing the potential of its pipeline of
promising drugs and small, so-called tuck-in deals to supplement
its current areas of focus.
For the first quarter, Allergan said revenue rose 48% to $3.8
billion compared with the same period a year earlier, during which
the Actavis deal closed. Sales were driven by flagship products
such as anti-wrinkle treatment Botox and growth of some newer drugs
like irritable-bowel therapy Linzess.
Analysts had expected revenue of $3.95 billion.
Mr. Saunders attributed the miss to one-time events, such as its
drug distribution unit's expected loss of Target Corp.'s pharmacy
business and an accounting change as a result of the Actavis
deal.
The performance report was the first for Dublin-based Allergan
since its planned $150 billion union with Pfizer Inc., of New York
City, was called off last month, after the Obama administration
issued rules designed to stymie such tax-lowering inversion
deals.
Meanwhile, Teva Pharmaceutical Industries Ltd. is moving ahead
with plans to buy Allergan's generic drugs business for $40.5
billion, which would effectively wipe away Allergan's debt. The
companies expect the deal to close by the end of June.
In preparation, Allergan announced a new leadership structure.
Bill Meury, who has been overseeing Allergan's branded drug sales,
becomes chief commercial officer, while supply-chain executive Bob
Stewart moves to become chief operating officer.
Once the Teva deal closes, Allergan would begin the share
buybacks, Mr. Saunders said. The company plans $4 billion to $5
billion in stock repurchases within the first four to six months
after the Teva transaction is completed. The company had a total
market value of about $84.4 billion as of Monday's market
close.
For the quarter, Allergan's profit was $255.7 million, compared
with a loss of $512.7 million during the same period a year
earlier. Earnings per share were 47 cents, compared with a loss of
$1.85 a year earlier.
Adjusted earnings per share were $3.04, above analysts'
forecasts of $3.01 a share, according to Thomson Reuters.
Specialty pharmaceutical companies like Allergan have been
shadowed by concerns about their prospects recently. The doubts
were triggered by scrutiny of Valeant Pharmaceuticals International
Inc.'s practices, and were re-stoked after Endo International PLC
lowered its guidance last week.
Mr. Saunders said he hoped investors recognize that each company
is different and Allergan is built on quality, fast-growing assets
and smart investments in drug development.
"There was a period of time here," he said, "where all companies
were being rewarded for accretive deals and cutting R&D. The
shakeout is saying, 'We want to see strong strategy and smartly
betting on innovation.' Long-term, that can be a good thing."
Jonathan D. Rockoff contributed to this article
Write to Nathan Becker at nathan.becker@wsj.com
(END) Dow Jones Newswires
May 10, 2016 07:55 ET (11:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Teva Pharmaceutical Indu... (NYSE:TEVA)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
Teva Pharmaceutical Indu... (NYSE:TEVA)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024