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What’s Pulling Down Allergan’s Share Price in 2019?

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Jun. 19 2019, Published 1:20 p.m. ET

Failed clinical trials

On March 6, Allergan (AGN) issued a press release announcing the failure of its investigational therapy rapastinel to meet the primary and secondary end points in three pivotal trials evaluating the drug as an adjunctive therapy in combination with antidepressant therapy in MDD (major depressive disorder) indications. The company also highlighted the possibility of its failing to meet the primary and secondary end points of its Phase 3 RAP-MD-04 trial evaluating the efficacy of rapastinel in preventing the relapse of MDD based on an interim analysis of the data from the trial. Based on these discouraging outcomes, Allergan plans to decide on the future of these programs in 2019.

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On April 3, Allergan and Molecular Partners issued a press release announcing favorable top line safety results from the 28-week open-label study MAPLE evaluating the investigational therapy abicipar in the treatment of neovascular age-related macular degeneration in patients. While the study reported an improved intraocular inflammation rate in patients compared to what was demonstrated in the Phase 3 CEDAR and SEQUOIA trials, Wall Street analysts weren’t impressed by these gains. Nevertheless, according to its first-quarter earnings conference call, Allergan plans to file applications seeking regulatory approval for abicipar in neovascular age-related macular degeneration indications in the US and the European Union in the first and second halves of 2019, respectively.

On August 21, 2018, the company issued a press release announcing its receipt of a complete response letter from the FDA rejecting its new drug application seeking approval for ulipristal acetate to treat abnormal uterine bleeding in women suffering from uterine fibroids.

Multiple failed clinical trials and regulatory setbacks have been some of the key drivers of investors’ increased concerns about AGN.

Ban on textured implants

In December 2018, Allergan first announced the suspension of the sales of textured implants and tissue expanders in the European Union. In April 2019, France and Canada announced the suspension of the sales of macro-textured breast implants due to the increased risk of breast implant–associated anaplastic large cell lymphoma. The FDA, however, has refused to ban the textured implants, citing limited data.

This increased safety risk has significantly affected Allergan’s sales of breast implants, especially in ex-US markets. In the first quarter, Allergan earned $72.4 million from the sale of breast implants, a YoY (year-over-year) fall of 30.9%. While sales in the US market were close to $61.2 million, a YoY rise of 0.8%, international market sales dropped 74.6% YoY to $11.2 million in the first quarter.

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