(Recasts to reflect net loss on write-down)
By Michael Erman and Natalie Grover
May 9 Botox-maker Allergan Plc posted a
first-quarter loss on Tuesday as it took a nearly $2 billion
write-down on the value of its stake in Teva Pharmaceutical
Industries, which has lost more than 40 percent of its
value since last year.
Allergan sold its generics business Actavis to Teva in
August 2016 for $33 billion in cash and 100 million shares of
the Israeli generic drugmaker, worth around $5.3 billion at the
time. Under the terms of the deal, Allergan agreed to hold on to
the shares for at least one year.
Teva has struggled since then, and the company's chief
executive stepped down in February after sharp criticism for a
string of costly acquisitions and delayed drug launches.
Allergan said its net loss was $2.63 billion, or $7.86 per
share, compared with a profit of $186.1 million, or 47 cents per
share, a year earlier.
Most of the loss was from the write-down of the Teva stake,
as well as research and development related costs.
Allergan said it concluded that Teva's decline was not
temporary and took the impairment. Allergan Chief Executive
Officer Brent Saunders told an Israeli newspaper earlier this
year that the company plans to sell the stake in cooperation
with Teva after the lockup period ends.
OPERATING EARNINGS BEAT ESTIMATES
Excluding the write-down and other costs, Allergan's
earnings exceeded analyst expectations. It earned $3.35 per
share in the quarter, beating the average analyst estimate by 5
cents, according to Thomson Reuters I/B/E/S.
Higher demand for its facial aesthetics, eye care and newer
products, more than offset declining sales of older drugs.
The company is armed with its top-selling Botox drug, known
for smoothing wrinkles, but it also had a busy deal-making 2016,
announcing at least a dozen deals.
This past February, Allergan agreed to buy Zeltiq to gain
access to a device which uses cooling to kill fat cells, adding
to its line-up of aesthetic products that are not dependent on
reimbursement for sales.
The company raised its forecast for 2017 slightly to reflect
the Zeltiq deal.
Shares of the Dublin-based company, which also posted
first-quarter revenue that edged past estimates, fell $1.51, or
0.6 percent, to $240.48 on the New York Stock Exchange on
(Reporting by Natalie Grover in Bengaluru; Editing by Martina
D'Couto, Bernard Orr)