JPM18: Allergan says no Restasis generic before second quarter
- At the J.P. Morgan Healthcare Conference in San Francisco, Allergan plc said that it does not expect a generic entry for Restasis (cyclosporine ophthalmic emulsion) before the second quarter of 2018.
- Allergan faces impacts from loss of exclusivity for Namenda XR and Delzicol this year, along with other drugs already facing generic competition. The company is responding with cuts to its operating expenses.
- The performance net income per share for the fiscal year 2018 is predicted to be $15.25. Allergan also predicts non-GAAP performance net income per share growth in 2019 compared with 2017.
Blockbuster Restasis (cyclosporine ophthalmic emulsion) sales were $1.06 billion in the first nine months of 2017, compared with $1.08 billion, a 1.6% fall year-on-year, and the impact of expected generics has been a concern for Allergan and investors.
CEO Brent Saunders tried to allay the fears at J.P. Morgan, saying that he doesn't expect a generic version to be launched before the second quarter this year.
The company has fought hard against Restasis generics. In a controversial move last year, Allergan attempted to shield Restasis from generic competition by transferring patents to the St. Regis Mohawk Tribe and taking advantage of sovereign Immunity. In October 2017, a federal district court judge invalidated four Restasis patents, and in January 2018, the Food and Drug Administration rejected a citizen petition challenging the regulator's approach.
Allergan is facing the financial impact of existing and forthcoming loss of exclusivities for other drugs this year, including Estrace (estradiol vaginal cream), Namenda XR (extended release memantine), Delzicol (mesalamine), and Aczone (dapsone).
To mitigate the economic blow, the company is working on ongoing cost reductions of $300-400 million for the fiscal year non-GAAP operating expenses, cutting from around $6.15 billion to around $5.8 billion. These reductions include cutting headcount by around 1,000 people, reducing promotion of brands facing loss of exclusivity, deprioritizing lower-potential programs and reducing internal basic research investments.
Allergan predicts the impact of the implementation of the tax overhaul signed late last year to be "broadly neutral" to the company's non-GAAP effective tax rate over time, with a moderate increase for 2018 over 2017. The expected non-GAAP tax rate for 2018 is expected to be no more than 15%. Further financial updates are expected February 6, 2018, when the company will release its fourth quarter and full year 2017 earnings.
- Allergan Statement
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