Botox maker lowers outlook

Allergan forecasts 2019 revenue below expectations on looming competition for some of its top drugs and has shelved plans to sell its women’s health business.

The firm is best known in Ireland for its Botox plant in Westport, Co Mayo, where it employs more than 1,160 people.

Its shares fell over 6.5% and have now dropped by almost a fifth in the past year.

Chief executive Brent Saunders put the company’s women’s health and infectious disease units on the block last May to focus on growing its core businesses, which include medical aesthetics and eye care.

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 the anti-infectives business would “more likely than not” be sold in the near term.

In the fourth quarter, the company recorded pre-tax impairment charges of $5.4bn (€4.7bn), including a goodwill write-off related to the anti-infectives unit and a charge from lower-than- expected sales of its double chin treatment Kybella, which it bought at a premium of 24% in 2015.

“Given questions around the past deals and management’s ability to execute, we think the street will likely view this large write-off negatively,” said Credit Suisse analyst Vamil Divan.

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.

Once a drug begins facing competition from multiple generic versions, it can quickly lose more than 80% of sales.

Sales of Restasis, the company’s second-most important drug, fell 17.7%, while sales of Botox, Allergan’s best-selling product, rose 9.4%.

Botox’s market-leading position in aesthetics and as an anti-wrinkle treatment has helped the company power past analysts’ profit estimates for much of the past, but concerns remain about the competitive threat from two smaller companies’ upcoming rival products.

Allergan said last year it was doubling its investment in direct-to-consumer ad spending and beefing up its sales force as companies like Revance Therapeutics and Evolus vie to wrest market share with rival treatments to Botox.

Excluding items, Allergan earned $4.29 per share in the fourth quarter.

Reuters; additional reporting Irish Examiner