Allergan's profit beats; migraine drug succeeds in key study
(Reuters) - Allergan Plc on Tuesday reported better-than-expected quarterly profit on robust demand for Botox, boosted its earnings forecast and announced positive data on one of the two migraine treatments it is developing.
Shares jumped 3 percent in early trading to $169.77 on a day of chaotic activity in the broader U.S. stock market.
Wall Street is focused on the company's drugs pipeline as it faces new cheaper competition for its Restasis eye treatment and its Namenda XR for Alzheimer's disease. The company sold its generic drug business in 2016, leaving its operations about split between aesthetic products and various drugs.
Allergan forecast earnings for 2018 in the range of $15.25 to $16.00 per share, excluding items. Analysts, on average, expect $15.50 after the company previously projected earnings of at least $15.25 per share.
The company said its tax rate would rise to about 14 percent in 2018, reflecting a new U.S. corporate tax law that has set a fresh minimum for companies. Because the company is headquartered in Dublin, Ireland, it has traditionally paid a lower tax rate than its U.S-based counterparts.
Chief Executive Officer Brent Saunders said on a conference call the company expects to maintain a step-back approach to mergers and acquisitions this year.
"2018 will most likely be a relatively boring year for Allergan on the M&A front," Saunders said.
MIGRAINE DRUG
Data on the drug Ubrogepant - a pill used to treat migraine episodes - came a bit earlier than analysts expected and was positive. The company expects two more studies before it submits the drug for regulatory approval next year.
The treatment belongs to a class of migraine drugs being developed by rivals such as Eli Lilly, Amgen and Alder Biopharmaceuticals that target a protein associated with pain signaling called CGRP.
Botox sales jumped nearly 17 percent to $864.3 million in the fourth quarter ended Dec. 31, above consensus estimates of $778.20 million, according to Thomson Reuters I/B/E/S. Sales of dry-eye drug Restasis rose nearly 1 percent to $414.9 million, ahead of estimates of $388.6 million.
Allergan recorded a gain of about $2.8 billion in the fourth quarter ended Dec. 31, related to recent changes in U.S. tax law. Net profit was $3.05 billion, or $8.88 per share, in the quarter, compared with a loss of $70.2 million, or $0.20 per share, a year earlier.
Excluding items, the company earned $4.86 per share, beating the average analyst estimate of $4.74.
(Reporting by Caroline Humer in New York and Manas Mishra in Bengaluru; Editing by Sayantani Ghosh and Bernadette Baum)