Top Takeaways From BMO's Specialty Pharma Day

In a report published Wednesday, BMO Capital Markets analyst David Maris discussed key takeaways from a day of meetings with several specialty pharmaceutical companies.

Below are some of the highlights of notable presentations.

Allergan PLC AGN:

• The company is planning to work with the FDA to find indications where there is a "viable path to approval" for Kythera and will make the decision on where to approach first once the deal has closed.
• 262 of the 267 people on its "high-priority" retention list have stayed with the new Allergan.
• Allergen is focused on Eluxadoline, Caripraine (two drugs on the horizon) but are still focusing on smaller drugs like IUD Liletta.
• Commenting on DARPin studies, which are about to begin, the company's CEO Brent Saunders said "if it works, it's going to be huge."
• Saunders also stated that the generics business is providing value to the company now.
• Allergan's Chairman Paul Bisaro noted that consolidation in the sector is good for the industry.

Teva Pharmaceutical Industries Ltd TEVA:

• Teva's global head of R&D, Dr. Michael Hayden, noted the possibility that its product for chronic and episodic migraine (TEV-48125) could receive breakthrough designation in chronic migraines from the FDA.
• The integration of generic and specialty R&D has allowed for the creation of new therapeutic entities, which have a shorter development timeline and low cost for development.
• There is a "self-confidence" among employees that it can succeed with or without an acquisition of Mylan NV MYL. The pursuit has also not halted a search for other value-adding assets.

Perrigo Company plc PRGO:

• Perrigo's CEO Joe Papa indicated that the mix of businesses is progressing well and has identified 20 products that can achieve significant gross margin improvements relatively quickly.
• Perrigo is looking to expand on Omega's established product lines in the E.U. and transfer the manufacturing of many of the products to Perrigo's internal plants.
• Papa also suggested that Mylan's offer undervalues the business. The analyst commented that the company will explore alternatives before taking the Mylan deal
• Perrigo is seeing some positive impact from GDUFA II but the real benefits to approval rates have yet to be seen.

Endo International plc ENDP:

• Endo's CEO Rajiv De Silva stated that its generics business has been a great performer and its Par acquisition will prove to be accretive to the business' gross and operating margins and also provide an attractive ROIC.
• Endo is hopeful that Belbuca will be approved in the first round for chronic pain. Management also noted that Belbeca has the potential to be the only schedule III drug on the market with a label similar to category II competitors.
• The company expects to be active in M&A very quickly following the closing of the Par deal.