By Michael Erman and Manas Mishra
(Reuters) - Allergan Plc's (N:AGN) chief executive on Monday said he was opposed to fundamental changes to the drug company's business strategy, even as its board considers drastic moves like splitting the company, selling off assets or doing deals to turn around a steep drop in its share price.
Botox maker Allergan's shares fell 2.2 percent to $158.42 in early trading on Monday. They have lost more than a third of their value over the last year.
The company announced a strategic review of its business earlier this year. Allergan has hired multiple advisers, CEO Brent Saunders said on a conference call following the company's quarterly earnings. It is considering five options: deploying capital to buy back shares, doing divestitures, splitting the company, making acquisitions, or continuing to operate Allergan as is.
Investors hoping for a major shift in strategy may be disappointed.
"Running the company in large part as it exists today is not only an option, but also the baseline against which all options need to be considered," Saunders said on the call, noting that his preliminary view was that a fundamental shift was unnecessary. "We're not going to execute an activity that doesn't recognize the full inherent value of our assets at Allergan."
Allergan did not bid for Shire Plc (L:SHP) earlier this month, after confirming reports that it considered an offer for the rare-disease treatment specialist.
Saunders said in an interview that large transformational deals are a "very low priority and a very unlikely outcome" of the review.
BETTER-THAN-EXPECTED EARNINGS
Allergan reported a better-than-expected first quarter profit and raised its full-year earnings forecast, driven by higher sales of its medical aesthetics products including blockbuster wrinkle treatment Botox.
Sales of Botox, its biggest drug by revenue, jumped 14.5 percent to $817.3 million in the quarter.
The company's aesthetics unit posted a near 30 percent jump in sales.
U.S. Sales of Allergan's eye drug, Restasis, which is expected to face competition from cheaper drugs, fell 17.2 percent.
The company now expects 2018 adjusted earnings of $15.65 to $16.25 per share, slightly above its previous forecast of $15.25 to $16 per share.
Its net loss was $332.5 million, or 99 cents per share, compared with $2.63 billion, or $7.86 per share, a year earlier.
Excluding one-time items, Allergan reported a profit of $3.74 per share, topping analysts' average expectation of $3.36, according to Thomson Reuters I/B/E/S.
Total revenue rose 2.8 percent to $3.67 billion, topping analysts' average estimate of $3.59 billion.