Allergan chief Saunders takes a painful $2.5B hit on an ugly PhIII flop
Now that Allergan chief Brent Saunders has stared down the activists — for now, anyway — the company is back with a $2.5 billion writedown for their failed depression drug rapastinel. The move spiked its net loss to $2.41 billion, or $7.25 a share $AGN — up from a loss of 99 cents a share for the same period a year ago.
Allergan’s mainstay Botox franchise, though, saved the day, allowing Saunders to sweeten the sour news with forecasts of rising profits on top of an earnings and revenue beat. But investors weren’t easy to win over, with the stock taking an initial 0.5% hit on the news.
Saunders had to pull out all the stops to win over 61% of the share vote to beat back an attempt to split the CEO and chairman’s role, a move that was directly targeting Saunders’ authority, as the CEO struggled with a slate of setbacks, which ranged from the Phase III rapastinel failure to the Supreme Court’s refusal to hear their argument over the patents they tried to hold on to for their cash cow Restasis.
Restasis sales slid about 10% for the quarter.
Allergan’s shares were trading near their high of $331 when they bought Naurex and rapastinel for $560 million. Right now they’re trading at about $148.