Allergan's Saunders 'cautiously optimistic' on healthcare reform
- Allergan reported second quarter earnings on Thursday of $4 billion, up 8.8% year-over-year, with an operating loss of $902 million for the period.
- CEO Brent Saunders said during the quarterly earnings call that the medical aesthetics business has plenty of room for growth, noting there are currently three million consumers using these products and nearly 30 million considering their use.
- The company’s medical aesthetics business brought in $643.9 million for the quarter, up from $419.8 million in the year-prior.
Saunders told analysts on the company’s second quarter call on Thursday morning that he’s "cautiously optimistic" about what is going on in Washington with regards to healthcare and initiatives at the Food and Drug Administration under new Commissioner Scott Gottlieb.
"I didn’t expect the White House to do anything while the Senate was debating healthcare reform," Saunders told analysts. "That is clearer now than it was a few weeks ago. The White House and the Senate are still debating about what to do next on healthcare and I think once that’s resolved the likelihood of an executive order would certainly increase."
The executive has been outspoken amongst his peers about drug pricing and hasn’t made friends within the industry by pushing for reforms.
"Based on what I’m seeing in the dialogues that exist today – and by no means do I have perfect insight into this – it appears to be constructive. I admire what Commissioner Gottlieb is doing to use the FDA powers to lower prices of medicines and create more competitive marketplaces. I think CMS and the administration are looking at opportunities that are also constructive," he said.
But Saunders thinks that all stakeholders – including government, industry and payers – have to make further moves to bring down the cost of drugs.
"We have to, in this country – and Allergan has taken a leadership position in this over a year ago – make medicines more affordable and accessible, while also creating the incentive needed to invest and find cures for unmet medical need," he added. "These are daunting tasks that require significant investment. There is a balance between the two and I think we all need to be sensitive to that balance and try to act responsibly."
Potential deals? Nothing groundbreaking
The company has spent the last several quarters feeding its existing franchises, as far as its business development efforts, and isn’t changing course any time soon. "Our strategy largely remains unchanged," the CEO said. "We’ll continue to focus on building out global leading positions in each of our therapeutic areas where we are relevant."
"I think if you look at the past as a good indicator of the future, our medical aesthetics business has paid off," he added. "Our pipeline is focused in areas like CNS, eye care and GI, and we’re looking for new product flow there just to strengthen out business over time and we continue to look at adjacencies."
Saunders also noted that international markets are very important to the company, and that Allergan continues to invest heavily in those markets, particularly areas of South America like Brazil.
- Allergan plc Statement
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