Back to top

Analyst Blog

Allergan, Inc. (AGN - Analyst Report) announced that it has completed the sale of its obesity intervention business. The obesity intervention business was sold to Apollo Endosurgery, Inc. for an up-front cash payment of $75 million and a $15 million minority equity interest in Apollo. Additional considerations include contingent payments of up to $20 million based on the achievement of certain regulatory and sales milestones.

We remind investors that on Oct 29, 2013, along with its third quarter 2013 results, Allergan announced that it had entered into a definitive agreement with Apollo for the sale of its obesity intervention business.

Allergan’s erstwhile obesity intervention business comprised several weight loss treatments including Lap-Band, an adjustable gastric banding system and the Orbera intra-gastric balloon system.

The company has classified the obesity intervention business under discontinued operations since the first quarter of 2013. Allergan’s board of directors after evaluating several strategic options for maximizing the value of their business decided to sell off this unit.

The obesity intervention segment has performed disappointingly over the past few years. Sales declined 21.5% in 2012. The obesity market is getting very competitive. Last year, two new obesity drugs - Belviq and Qnexa - were approved. Other companies are also developing candidates targeting the lucrative obesity market. Sale of the struggling business unit will enable the company to focus on its areas of strength.
    
Allergan carries a Zacks Rank #3 (Hold). Some better-ranked stocks include Actelion Ltd. (ALIOF), Jazz Pharmaceuticals (JAZZ - Analyst Report) and Bayer (BAYRY - Analyst Report). While Actelion and Jazz Pharma carry a Zacks Rank #1 (Strong Buy), Bayer holds a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%