New CM Treatment A Positive Development For Allergan, Wells Fargo Reports

After the close on Friday, 10/15/10, Allergan, Inc. (NYSE: AGN) announced that the FDA approved Botox for chronic migraine (CM), Wells Fargo reports, noting that the approval came a few weeks sooner than we expected.

“We view this news very positively because we believe the CM indication will contribute about $500MM in incremental sales to AGN by 2014 and will increase AGN's 2010-2014 sales CAGR by 200bps (6.8% vs 4.8%),” Wells Fargo writes.

“The CM indication will very likely augment AGN's EPS growth by a greater degree given the low level of incremental investment needed to drive CM sales because AGN is already promoting Botox to neurologists for other indications.”

Allergan currently trades for $71.88.