Botox maker Allergan not to sell women’s health business
CEO U-turns on plans as patent challenge to key drug sees company guide below analyst expectations for 2019
Allergan forecast 2019 revenue below analysts’ estimates, as it faces impending competition for its second-most important medicine, the eye drug Restasis. Photograph: Thomas White/Reuters
“For women’s health, we have concluded that the highest value proposition for this business at this time is to continue managing it and optimising it,” Mr Saunders said.
He also said the company’s anti-infectives business will “more likely than not” be sold over the near term.
The company had said in May it was looking to sell both its women’s health and infectious disease units following a review of its businesses.
The announcements came as Allergan forecast 2019 revenue below analysts’ estimates, as it faces impending competition for its second-most important medicine, the eye drug Restasis.
The company’s shares fell 3 per cent before the opening bell.
Allergan has warned that profits will be hurt once generics of Restasis hit the market after a bid to protect that drug’s patents met regulatory scrutiny. Sales of Restasis fell 17.7 per cent to $341.6 million in the fourth quarter.
Excluding items, the company earned $4.29 per share, beating analysts’ expectations of $4.15 per share. Net revenue fell to $4.1 billion from $4.33 billion.
The company reported net loss attributable to shareholders of $4.3 billion, or $12.83 per share, for the fourth quarter, compared with a profit of $3.05 billion, or $8.88 per share, a year earlier, when the company recorded gains from changes in US tax laws.
Allergan has asked the Supreme Court to rule that the Saint Regis Mohawk Tribe in upstate New York – to which it sold the Restasis patent 16 months ago for $13.75 million up front and agreed to pay up to $15 million a year in royalties as long as the patents remained valid – can use its sovereign immunity to fend off challenges by makers of low-cost generic copies of the best-selling prescription eyedrops for chronic dry eye.
The company also announced last week that it was suing smaller rival Prollenium in federal court for patent royalties on sales of its Revanesse Versa+ wrinkle-filler, claiming the product infringes two of the patents for Juvederm.
Allergan is demanding cash compensation and an order blocking sales of Versa+, according to a complaint filed Tuesday in Wilmington, Delaware.
Mr Saunders said at the JPMorgan Healthcare Conference earlier this month that medical aesthetics account for about 27 per cent of the company’s revenue.
“We believe this market will double over the next five to six years,” Mr Saunders said at the J P Morgan Healthcare Conference. Allergan has about 7 per cent of the market, “and we estimate we can get to 10 per cent or 15 per cent penetration in just a few years, and then very importantly, millennials,” he said.
Demand for Juvederm products has been growing faster than for Botox during the past couple of years, Mr Saunders said last month at another healthcare conference.
The company, which manufactures botox at its Westport plant in Co Mayo, forecast full-year 2019 revenue of $15-$15.3 billion, compared with analysts’ estimates of $15.4 billion.
The results come as the US Congress is gearing up for what promises to be a yearlong investigation of drug prices, with House and Senate committees planning to hold hearings on Tuesday. – Reuters