UPDATE: Piper Jaffray Lowers PT on Allergan Following FDA Draft Guidance

In a report published Monday, Piper Jaffray analyst David Amsellem reiterated a Neutral rating on Allergan AGN, but lowered the price target from $90.00 to $79.00.

In the report, Piper Jaffray noted, “On Friday, the FDA published draft guidance on bioequivalence (BE) standards for potential generic versions of Allergan's Restasis. The guidance gives generics a clear path to market without a clinical trial requirement, which stands in stark contrast to AGN's stated expectations. Though proving BE will not necessarily be simple, we do believe there are a number of generic companies with the sophistication to at least pursue the product, and certainly a path forward without clinical trials makes the opportunity that more attractive. Given the specter of a Restasis erosion longer-term (LT), and real uncertainty in our view over AGN's ability to deliver on consistent LT double-digit EPS growth, we believe further P/E compression is warranted. We expect to see further weakness in AGN shares. We reiterate our Neutral rating and are lowering our PT to $79 from $90, reflecting the greater uncertainty over Restasis.”

Allergan closed on Friday at $92.70.