Allergan's Pipeline Is 'Underappreciated'

Allergan plc (NYSE: AGN) has a “broad and underappreciated” pipeline, which should boost the company’s already robust base business, Credit Suisse’s Vamil Divan said in a report. He initiated coverage of the company with an Outperform rating and a price target of $327.

Investment Positives

Analyst Vamil Divan mentioned the investment positives as:

1. Open science model for building a broad pipeline, which is not being given enough credit by investors.
2. A solid and growing base business.
3. Compelling valuation with highly attractive risk/reward at current levels. The valuation could close the gap with major pharmas over time, given Allergan’s evolving business model, Divan commented.
4. A best-in-class management team, with a track record of success and delivering shareholder value.

Related Link: Allergan Files De Novo Application For Approval Of Oculeve Intranasal Tear Neurostimulator

Catalysts

The analyst enumerated the catalysts as:

1. The imminent close of sale of the generics business to Teva Pharmaceutical Industries Ltd (NYSE: TEVA).
2. The announcement of 2Q16 earnings, scheduled for August 8.
3. Multiple incremental data points from the pipeline, “including Phase 3 data for MIM-D3 (dry eye), Phase 2 data for Linzess colonic release and Phase 2 data for relamorelin (diabetic gastroparesis),” Divan noted.

“Interest in the stock should improve over next 12 months with increased focus on underappreciated pipeline and base business strength,” the analyst wrote.

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