Allergan's Pipeline Is 'Underappreciated'

Allergan plc AGN has a “broad and underappreciated” pipeline, which should boost the company’s already robust base business, Credit Suisse’s Vamil Divan said in a report. He initiated coverage of the company with an Outperform rating and a price target of $327.

Investment Positives

Analyst Vamil Divan mentioned the investment positives as:

1. Open science model for building a broad pipeline, which is not being given enough credit by investors.
2. A solid and growing base business.
3. Compelling valuation with highly attractive risk/reward at current levels. The valuation could close the gap with major pharmas over time, given Allergan’s evolving business model, Divan commented.
4. A best-in-class management team, with a track record of success and delivering shareholder value.

Related Link: Allergan Files De Novo Application For Approval Of Oculeve Intranasal Tear Neurostimulator

Catalysts

The analyst enumerated the catalysts as:

1. The imminent close of sale of the generics business to Teva Pharmaceutical Industries Ltd TEVA.
2. The announcement of 2Q16 earnings, scheduled for August 8.
3. Multiple incremental data points from the pipeline, “including Phase 3 data for MIM-D3 (dry eye), Phase 2 data for Linzess colonic release and Phase 2 data for relamorelin (diabetic gastroparesis),” Divan noted.

“Interest in the stock should improve over next 12 months with increased focus on underappreciated pipeline and base business strength,” the analyst wrote.

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