Lost in the VRX Hate, Allergan's Value

[Anonymous]

Is extremely bloated. AGN's stock is up 100% year over year. Their 52 week low traded at $82.56. The stock is trading today at almost $170.

With all of the talk of VRX's "house of cards" what happens if/when this deal doesn't go through?

Allergan was trading at around $115 before the offer. Pyott has repeatedly raised guidance to try to convince the market AGN's standalone value is better than what VRX is offering. No one would question AGN's growth, but I certainly don't buy the level of growth Pyott is trying to sell Wall Street.

Talk about a house of cards. If the deal falls through, and Ackman and the Hedge Funds take their gains, you will see AGN back under $100 a share overnight. Will it get back to $145-$150 in the next 5 years? Maybe. But its not a risk most shareholders will take.

 

[Anonymous]

This is a great point, and as an Allergan rep, this is why I am at home today working on my resume. Regardless of the outcome of the takeover, this will not end well.

 

[Anonymous]

that was before the new patents on restasis, new growth plan, raised EPS, 5 year guidance, cost cuts, pipeline unveiling, revenue increases, product approvals, etc. Look at analysts reports for a stand alone allergan

Valeants 1 year low is $84 too - what's $84 X .73 / share?

Check out what valeants stock price was doing in Q1

 

[Anonymous]

that was before the new patents on restasis, new growth plan, raised EPS, 5 year guidance, cost cuts, pipeline unveiling, revenue increases, product approvals, etc. Look at analysts reports for a stand alone allergan

Valeants 1 year low is $84 too - what's $84 X .73 / share?

Check out what valeants stock price was doing in Q1

I think that is exactly the OP's point. I don't believe Pyott woke up in the last 4 weeks and found out about the new patent for Restasis, or suddenly was hit with a great new growth plan. He's promising things that are, quite frankly, pie in the sky.

And as it relates to cost cuts and revenue increases...in my world that means cuts to sales, cuts to marketing, cuts to R&D, cuts to salary, and an increase in quota. So again, that's why I am getting my resume together. Even if we beat it-- this won't be the Allergan we know and love.

 

[Anonymous]

I think that is exactly the OP's point. I don't believe Pyott woke up in the last 4 weeks and found out about the new patent for Restasis, or suddenly was hit with a great new growth plan. He's promising things that are, quite frankly, pie in the sky.

And as it relates to cost cuts and revenue increases...in my world that means cuts to sales, cuts to marketing, cuts to R&D, cuts to salary, and an increase in quota. So again, that's why I am getting my resume together. Even if we beat it-- this won't be the Allergan we know and love.

hardly any of that happend in the last 4 weeks. Restasis patents happend in November but was why we were compressed for a few months last summer. When Darpin pops you going to give ackman credit for that too?

Sales marketing and R&D have ROI - hence why valeant doesn't have R because they don't I -- see medicis for example -- oh wait, you can't now because they sold it to keep the numbers masked.

 

[Anonymous]

Is extremely bloated. AGN's stock is up 100% year over year. Their 52 week low traded at $82.56. The stock is trading today at almost $170.

With all of the talk of VRX's "house of cards" what happens if/when this deal doesn't go through?

Allergan was trading at around $115 before the offer. Pyott has repeatedly raised guidance to try to convince the market AGN's standalone value is better than what VRX is offering. No one would question AGN's growth, but I certainly don't buy the level of growth Pyott is trying to sell Wall Street.

Talk about a house of cards. If the deal falls through, and Ackman and the Hedge Funds take their gains, you will see AGN back under $100 a share overnight. Will it get back to $145-$150 in the next 5 years? Maybe. But its not a risk most shareholders will take.

On the flip side, do we really think Valeant will reach 200 or whatever they're touting after the merger? Everyone seems to overestimate their own companies. You also have to take into account how the market overall is performing and was performing when AGN was hitting is lows. It's really difficult to see what the true value of AGN is right now because of all this noise from the Valeant buyout.

I think investors should be asking themselves whether they want immediate payout with the possible risk of VRX stock not performing well afterwards, or if they want something with steady growth and long term gains. I doubt AGN would fall back to 100 overnight.

 

[Anonymous]

Is extremely bloated. AGN's stock is up 100% year over year. Their 52 week low traded at $82.56. The stock is trading today at almost $170.

With all of the talk of VRX's "house of cards" what happens if/when this deal doesn't go through?

Allergan was trading at around $115 before the offer. Pyott has repeatedly raised guidance to try to convince the market AGN's standalone value is better than what VRX is offering. No one would question AGN's growth, but I certainly don't buy the level of growth Pyott is trying to sell Wall Street.

Talk about a house of cards. If the deal falls through, and Ackman and the Hedge Funds take their gains, you will see AGN back under $100 a share overnight. Will it get back to $145-$150 in the next 5 years? Maybe. But its not a risk most shareholders will take.

here is a link to some analysis on DARPin in the comments- You are spot on that this puts a big question on AGN growth needed to deliver to meet Wall St. expectations.
http://seekingalpha.com/news/1772693-valeant-boosts-offer-for-allergan

 

[Anonymous]

Future value might be a stretch

No news from CHMP today on Ozurdex in DME.. Was scheduled in the agenda for an Oral Explanation

http://www.ema.europa.eu/docs/en_GB/document_library/Agenda/2014/06/WC500169170.pdf

But nothing in the meeting highlights and no mention of it in the section on "recommendations on extensions of therapeutic indications".....

http://www.ema.europa.eu/ema/index....news_detail_002129.jsp&mid=WC0b01ac058004d5c1

NOT A GOOD SIGN IF NOT APPROVED ??