Categories Earnings, Other Industries

Allergan to sell women’s health and infectious disease units

Allergan Plc (AGN) is planning to sell its women’s health and infectious disease businesses after completing its strategic review. The sale would help the drug maker to concentrate on eye care, medical aesthetics, and dermatology, gastrointestinal and central nervous system businesses.

Allergan will use the proceeds from this transaction to pay down debt and buy back shares. This strategic review will enable the company to consider options such as making acquisitions, selling assets, splitting up, and using the capital to repurchase shares.

In the Bernstein Thirty-Fourth Annual Strategic Decisions Conference executive chief Brent Saunders said, “We have initiated a process for creating value by selling our women’s health and infectious disease businesses.”

The women’s health business is valued at $4 billion and the infectious disease business at $2 billion, according to CNBC citing a Cowen research note.

In a separate release, Allergan issued a nationwide recall of Taytulla birth control pills as nearly 170,000 packs contained placebo pills in the wrong place. A physician notified Allergan of the packaging error that meant the first four days in the pack contained the maroon placebo capsules, which potentially put women at risk of pregnancy. Typical pack contains 24 days of pink capsules with oral contraceptive hormones, followed by the placebo.

The company’s stock has been struggling since last year. Shares of Allergan, which were trading down during the early hours of trading, turned positive after 12 PM ET today. For the past 52 weeks, the stock had been on the downward trend and tumbled more than 32%.

For the recently completed first-quarter, the Dublin, Ireland-headquartered company reported revenue and adjusted earnings figures that exceeded Street’s expectations. A 13% increase in Allergan’s core business, including Botox and Juvederm brands, drove a 3% rise in revenue for the quarter.

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