The expansion strategy of Allergan plc Ordinary Shares (NYSE:AGN) relies heavily on acquisitions and this has seen the pharmaceutical company become one of the top ten pharmaceutical firms in the world in terms of sales. This year Allergan has grown its business of medical aesthetics by acquiring Zeltiq and Lifecell which will now see it get into body sculpting and regenerative medicine.
Last year Allergan sold its Anda distribution business as well as its genetics business to Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA). This resulted in Allergan becoming a leader in branded biopharmaceuticals. Allergan can now consequently concentrate on branded pharmaceutical products and use the proceeds to pursue additional deals, pay down debt or buy back shares.
New products
Key products from Allergan such as Linzess and Botox as well as new products such as Vraylar and Viberzi are supporting the growth of sales since they are enjoying strong demand. Allergan also has a strong pipeline as nine product launches are planned for this year. Last year the pharmaceutical giant launched ten new products and this included Namzaric, Kybella, Viberzi and Vraylar. This year Allergan is also planning to extend its research and development pipeline to adjacent categories such as gene therapy, Parkinson’s disease and NASH. A couple of phase II and phase III programs that are promising are also in development.
Another significant opportunity that exists for Allergan are biosimilars. The company has a collaborative partnership with Amgen, Inc. (NASDAQ:AMGN) which will see the two pharmaceutical firms develop and commercialize 3 oncology antibody biosimilars. This includes biosimilars developed by Roche Holding such as the two cancer drugs, Avastin and Herceptin.
Patent challenges
Some of the challenges that Allergan faces include patent challenges for products such as Minastrin 24, Delzicol, Asacol, Namenda XR and Generess Fe. This year franchise sales of Namenda will continue to fall as Namenda XR’s generic version enters the market during the fourth quarter.
Other Allergan products which are key drivers of growth such as Linzess and Restasis are also encountering strong competition.
In Monday’s trading session shares of Allergan plc rose by 1.08% to close the day at $248.91 per share.
