Revenue guidance

In its first-quarter earnings investor presentation, Allergan (AGN) revised its 2019 revenue guidance upward from its previous estimate of $15.0 billion–$15.3 billion to $15.1 billion–$15.4 billion. While its previous guidance had assumed a loss of exclusivity for Restasis by March 31, 2019, the new guidance is based on the assumption of a loss of exclusivity happening in mid-May. The company estimates that every month of Restasis exclusivity will boost its revenue by $60 million–$70 million. The company hasn’t factored the effects of future divestitures into this guidance.

According to the company’s first-quarter earnings conference call, this new revenue guidance implies a YoY (year-over-year) rise in the mid- to high-single-digit range, in line with what it reported in 2018 despite ongoing challenges associated with recall of Ozurdex, foreign exchange fluctuations, increasing drug pricing pressures, and the withdrawal of textured breast implants from the European Union in December 2018.

In the first quarter, the company reported revenue of $3.60 billion, a YoY fall of 2.04% but higher than its guidance range of $3.40 billion–$3.55 billion. Its revenue also surpassed the consensus estimate by $46.94 million.

Allergan expects its revenue to rise in the remaining quarters of 2019, especially in the second half of 2019, due to the annualization of problems such as the Ozurdex recall and the donor supply problems associated with AlloDerm. The company has guided for second-quarter revenue of $3.85 billion–$4.00 billion.

Wall Street estimates

Analysts expect Allergan’s revenues to see YoY changes of -3.10% to $15.27 billion in 2019, 2.18% to $15.61 billion in 2020, and 3.39% to $16.13 billion in 2021. They expect the company’s revenues to see YoY falls of -4.68% to $3.91 billion in the second quarter, -3.71% to $3.77 billion in the third quarter, and -2.54% to $3.98 billion in the fourth quarter of 2019.

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