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Allergan (AGN) to Report Q1 Earnings: What's in the Cards?

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Allergan plc is expected to report first-quarter 2020 results soon.

In the last reported quarter, the company delivered a positive earnings surprise of 13.23%.

Allergan plc Price and EPS Surprise

Allergan plc Price and EPS Surprise

 

 

 

 

 

 

 

 

Allergan plc price-eps-surprise | Allergan plc Quote

Allergan’s share price has declined 1% this year so far compared with the industry’s decrease of 6.2%.

 

 

 

Allergan’s earnings performance has been strong, with the company beating expectations in three of the past four quarters while matching estimates in one. The four-quarter average positive earnings surprise is 5.23%.

Factors to Consider

Allergan’s sales in the first quarter are likely to have been hurt by loss of exclusivity on some brands. As in the previous few quarters, sales of blockbuster drug Restasis may have declined in the quarter.

Nonetheless, key products like Botox (both cosmetic and therapeutic), Juvéderm collection of fillers, Vraylar, Linzess and Lo Loestrin are likely to have supported sales growth in the quarter. Sales of CoolSculpting are likely to have declined in the quarter.

Investors will look for updates on the extent to which the coronavirus pandemic may have impacted sales of Allergen’s products. A widespread decline in elective surgical procedures and redeployment of hospital resources to address patients affected by the pandemic may have had an impact on Allergan’s product sales.

Allergan is due to be acquired by AbbVie (ABBV - Free Report) in a cash-and-stock deal worth nearly $63 billion per an announcement in June last year. The merger is expected to close this year. In connection with the pending merger, in January, Allergan announced a definitive agreement to divest its mid-stage immunology candidate brazikumab and marketed medicine, Zenpep to AstraZeneca (AZN - Free Report) and Nestle, respectively. In March, the European Commission (EC) approved the divestiture of brazikumab to AstraZeneca. The EC had approved the merger in January, conditional on the divestiture of brazikumab. EC’s final approval clears the path in Europe for the pending merger. Some questions on the timeline of the merger closing are expected on the first-quarter conference call.

In December 2019, Ubrelvy (ubrogepant), Allergan’s oral CGRP antagonist for migraine, was approved by the FDA. We expect management to discuss initial sales of the new drug on the first-quarter conference call.

In March, Allergan’s biodegradable implant Durysta (bimatoprost) was approved by the FDA to reduce intraocular pressure (IOP) in patients with open-angle glaucoma (OAG) or ocular hypertension (OHT).  We expect management to discuss launch/commercialization plans for the same on the conference call.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Allergan this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

Earnings ESP: Its Earnings ESP is 0.00% as the Zacks Consensus Estimate as well as the Most Accurate Estimate stand at $4.24. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Allergan carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

A large biotech stock that has the right combination of elements to beat on earnings this time around is Alexion Pharmaceuticals . Alexion has an Earnings ESP of +1.08% and a Zacks Rank #3. The company is scheduled to release results on May 6.You can see the complete list of today’s Zacks #1 Rank stocks here.

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