Market Overview

Botox Competition Spurs Argus To Downgrade Allergan

Share:
Botox Competition Spurs Argus To Downgrade Allergan
Related AGN
A Peek Into The Markets: U.S. Stock Futures Up Ahead Of Economic Data
10 Stocks To Watch For December 21, 2017
Your Daily Pharma Scoop: Ablynx Takeover Battle, Acorda Takeover Speculation, Oramed Update (Seeking Alpha)

Shares of Allergan plc Ordinary Shares (NYSE: AGN) continue trading near their multi year low of $160.07, with many investors concerned with a competitive environment that will intensify in the coming years.

The Analyst

Argus' David Toung downgraded Allergan's stock rating from Buy to Hold.

The Thesis

Allergan will see two of its major products, Botox and Restasis, face major competition, which justifies a reduction in the stock's rating, Toung said in the downgrade note. (See Toung's track record here.)

Botox will likely compete with what is considered to be a "better Botox" alternative by Revance Therapeutics Inc (NASDAQ: RVNC) called RT002, Toung said. And the dry eye treatment Restasis will likely see generic competition by the middle of next year after a U.S. District Court invalidated the company's patents.

Botox accounted for $2.79 billion of Allergan's 2016 revenue and demonstrated a double-digit growth rate in the third quarter of 2017, the analyst said. Allergan took a $3.2-billion asset impairment charge in the third quarter to better reflect the write-down of the patent assets.

Allergan does have some late-stage data readouts due to be released next year which could improve investor sentiment, Toung said. The company could also offset Restaiss losses through new products and assets via acquisitions, the analyst said.

Price Action

Shares of Allergan were trading lower by more than 2 percent Thursday morning and are down nearly 22 percent since the start of 2017.

Related Links:

Analyst Says Negative Allergan Headlines Are Priced In, Upgrades Stock

Imprimis Launches 99-Cent Generic Drug To Compete With Allergan's Restasis

Latest Ratings for AGN

DateFirmActionFromTo
Dec 2017ArgusDowngradesBuyHold
Nov 2017Morgan StanleyUpgradesEqual-WeightOverweight
Nov 2017Leerink SwannReinstatesOutperformOutperform

View More Analyst Ratings for AGN
View the Latest Analyst Ratings

Posted-In: Argus BOTOX David ToungAnalyst Color Downgrades Health Care Analyst Ratings General Best of Benzinga

 

Related Articles (AGN + RVNC)

View Comments and Join the Discussion!