- While Allergan remains confident that its legacy brands will continue to provide profits despite generic competition and clinical setbacks, the specialty drugmaker is making sure to flesh out its pipeline in preparation of a worst-case scenario.
- The New Jersey-based company reported first quarter revenues of $3.57 billion, a 5.1% increase from the same period in 2016. Iconic aesthetics brand Botox (onabotulinumtoxinA) was a major growth driver, with income up 12% to $714 million. Nearly $75 million in combined revenues from Alloderm and Sattrice — reconstructive treatments picked up through the acquisition of LifeCell — also helped bottom lines.
- But with copycat drugs already weighing heavily on Namenda (memantine HCl) sales and threatening to do the same for Restasis (cyclosporine), the company is concentrating on bringing six "star programs" to market, and isn't turning a blind eye to more M&A either.
Allergan has its hand in a bunch of jars, looking to both buttress core therapeutic areas while also expand its pipeline as a kind of fail safe in the event that its biggest products take harsh tumbles.
That already happened with Alzheimer's drug Namenda, which lost patent exclusivity in 2015 and has seen revenues plummet ever since. The extended release (XR) version of the drug is still one of Allergan's top-sellers, and the company is hoping to continue the franchise's profitability with Namzeric (memantine HCl & donepezil HCl), a follow-on slated to take control of one-third of Namenda's market by the end of 2017.
Still, Namenda XR sales fell 30% year-over-year to $122 million in the first quarter.
Allergan is working to prevent a repeat of that with its leading eye treatment Restasis. Akorn, which was recently acquired by Fresenius Kabi, sought approval for its version of the drug with the Food and Drug Administration a couple years back, though it never happened. Generic maker Mylan has a copycat made as well, and recently received the green light from the U.S. Patent Office's Patent Trial and Appeal Board to launch a review of six patents held by Allergan for Restasis that expire in 2024.
However, Allergan leadership appeared confident during a first quarter earnings call that their intellectual property rights would keep competition at bay, at least in the near-term.
"There are multiple shots on goal here to hold off generic competition," the company said during the call, later explaining that between the potential for Mylan to launch at-risk, for injunctions, and for Allergan's ability to roll out its own authorized generic, there's plenty blocking a Restasis copycat's path to market.
If that were to happen, though, Allergan seems to be in a good spot. The recent acquisitions of Zeltiq and Lifecell further develop its aesthetics business, which brought in $490 million during the first quarter, a 31% increase year-over-year.
In fact, Allergan increased 2017 revenue guidance to reflect Zeltiq's integration. Given such optimism around recent deals, CEO Brent Saunders said more small deals could be on the horizon.
"On the [business development] front, we remain very active and pluggeed into the global marketplace. I think our strategy is essentially unchanged as we continue to look at stepping stone transactions," he said, adding that "we don't have a big gap in our business that we need to cover for, so the odds of us doing large M&A I think are very low."