Dive Brief:

• Allergan plc reported full-year 2017 revenues of $15.94 billion on Tuesday morning. The specialty pharma had an operating loss of $5.92 billion due largely to impairment charges related to its drugs Restasis and Aczone.
• The company also reported positive topline Phase 3 data for its CGRP inhibitor ubrogepant, which met its primary endpoint of achieving pain freedom within two hours after treatment with both the 50mg dose and the 100mg dose.
• Both doses of the oral acute migraine drug also alleviated most of the "bothersome migraine-associated symptoms" within two hours. 

Dive Insight:

Analysts and investors are not particularly concerned with the sales of Allergan's current products — save the blockbuster aesthetic and therapeutic injectable Botox (onabotulinumtoxinA).

The drug, known for its use as a wrinkle smoother, has a wide range of therapeutic indications, including chronic migraine, urinary incontinence and hyperhidrosis. It brought in $864.3 million during the fourth quarter, up 17% year-over-year. Seventy-one percent of Botox sales came from the U.S., with nearly 63% of that coming from the therapeutic indications.

Yet, now the specialty pharma has given up major M&A in favor of bolt-on deals, and the focus has shifted to the six or so near-term pipeline opportunities which Allergan has cobbled together.

CEO Brent Saunders added during the Feb. 6 investor call that its going to be "a quiet year" for the company on the dealmaking front.

But for a company that is known for buying innovation, it is now trying to be a leader in several closely watched therapeutic areas. One of those key spaces is migraine.

The CGRP class has several big companies playing in the space, including Eli Lilly & Co., Novartis AG and Amgen Inc. Yet, most of these are monthly or twice-monthly injectables that are designed for migraine prevention. Allergan's ubrogepant, on the other hand, is an oral compound meant to be taken to alleviate a single migraine attack should one occur. Allergan has another similar compound, called atogepant, earlier in its pipeline that would compete with the treatments meant for prevention. 

The data from the ACHIEVE 1 study, one of two Phase 3 studies the company is conducting, showed the drug to be efficacious. The 1,327-patient trial also showed ubrogepant had low incidence of liver toxicity — a problem seen in earlier small molecule CGRP inhibitors. 

While the news was positive for the company and its pipeline of drugs on which it depends, analysts were openly concerned on the earnings call with how the entrance of the CGRP class and ubrogepant to market would affect sales of Botox.

Company executives said about 20% of Botox sales come from the migraine indication. Saunders tried to reassure analysts that there is space in the market for both products, but skepticism abounded.

Botox is only indicated for prophylaxis of chronic migraine, rather than acute treatment. In the past, Allergan executives have commented that the two treatments could complement each other, with ubrogepant slotting in as a spot treatment for individuals whose migraines aren't completely controlled by Botox. 

Allergan executives don't expect Botox migraine users to switch products to other anti-CGRP prophylaxis treatments if their condition is being well maintained — partly due to the hard-to-treat nature of the condition, but also due to cost constraints.