Allergan Plc Chief Executive Brent Saunders said on Tuesday that he and the board of directors were looking with a sense of urgency at all options to revive the Botox maker’s falling share price, but a lack of specifics failed to boost investor sentiment.
Allergan shares fell more than 4 percent despite reporting better-than-expected first-quarter profit and raising its 2019 sales and earnings forecasts, more than twice the drop in the broader markets. They are trading nearly 60 percent below their 2015 high of about $340.
“We leave the first-quarter call with even less confidence that value in Allergan will be unlocked over the near term; catalysts are few, as are reasons to expect shares to move higher,” said RBC Capital Markets analyst Randall Stanicky.
Allergan shareholders last week voted down a non-binding proposal by activist investors that sought an immediate split of the CEO and chairman roles, but it was hardly a resounding victory for Saunders. Nearly 40 percent of shareholders backed the proposal.
Saunders said the board had talked to more than 50 shareholders recently and heard a common theme of frustration with the company’s falling stock price.
“I assure you that the board, management team and I recognize the urgency, and we will take decisive action to drive value-enhancing opportunities,” Saunders promised.
However, he did not outline any steps the board was considering, saying “everything is on the table.”
Excluding items, the company earned $3.79 per share, topping analysts’ average estimates by 24 cents, according to Refinitiv IBES data.
The company now expects 2019 adjusted profit to be greater than $16.55 per share, up from its prior expectation of greater than or equal to $16.36.
“The guidance they put out for full-year basically includes the beat in first quarter and doesn’t carry anything beyond that,” said Kevin Kedra, an analyst with Gabelli & Co, which owns Allergan’s shares.
Earnings were helped by a delay in generic competition for dry-eye drug Restasis. The company expects generic competition for Restasis later this month.
Botox sales, including cosmetic and prescription uses, rose 6.3 percent to $868.4 million, while Restasis sales fell 11.7 percent to $242 million, primarily due to lower net pricing.
U.S. sales of CoolSculpting, which removes fat non-surgically fell 27.8 percent to $62.9 million.
Revenue fell 2 percent to $3.59 billion in the quarter.
Allergan forecast 2019 sales between $15.13 billion and $15.43 billion, compared with its prior range of $15.00 billion to $15.30 billion.
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