Allergan delays eye drug, shares fall
(Reuters) - Allergan Inc (AGN.N), maker of the Botox anti-wrinkle treatment, said it will delay late-stage trials of its highly anticipated eye drug Darpin, sending its shares down 14 percent.
Shares in Regeneron Pharmaceuticals Inc (REGN.O) rose 14 percent on news that the potential rival to its Eylea drug, used to treat the leading cause of blindness in the elderly, would take longer than expected to reach market.
Allergan Chief Executive David Pyott said on a conference call that a mid-stage trial of Darpin showed some product differentiation over Roche Holding AG's (ROG.VX) rival Lucentis eye treatment, but did not support directly moving to late-stage development.
The company now plans to perform additional mid-stage development work to assess the drug's safety and efficacy.
It now expects the drug's approval to be delayed by one to two years.
"If the Darpin program is not going to move forward - or is delayed significantly - we could envision significantly more (stock) weakness than already experienced this morning," Cowen and Co analyst Ken Cacciatore said in a note.
Both Darpin and Eylea are intended to treat age-related macular degeneration of the eye, or damage to the macula - the central region of the retina.
A mid-stage trial of Allergan's hair loss treatment Bimatoprost Scalp also failed to provide sufficient efficacy to proceed to a late-stage study, and the company said it will be extending the mid-stage development program.
Shares of the Irvine, California-based company were down 10 percent at $102.02 in mid-day trading on the New York Stock Exchange.
Q1 RESULTS OVERSHADOWED
Allergan posted a higher-than-expected quarterly profit, helped by strong sales of Botox.
Net income for the first quarter fell to $12.5 million, or 4 cents per share, due to a loss of $259 million from its discontinued operations. Profit was $229.8 million, or 74 cents per share, a year earlier.
Excluding special items, Allergan earned 98 cents per share. Analysts were expecting 96 cents, according to Thomson Reuters I/B/E/S.
Global company sales rose 8 percent to $1.46 billion, above Wall Street's average estimate of $1.44 billion.
Sales of Botox, which is also approved for treating migraine headaches, overactive bladder and underarm sweating, rose 15 percent to $457.9 million.
Allergan also forecast slightly weak earnings for the second quarter and the full year to reflect the impact of its MAP Pharmaceuticals acquisition earlier this year.
It now expects 2013 adjusted earnings of $4.70 to $4.76 per share, compared to its prior outlook of $4.75 to $4.83.
The company forecast a second-quarter profit of $1.18 to $1.20 per share, below analysts' average estimate of $1.22.
(Reporting by Esha Dey in Bangalore; Editing by Sreejiraj Eluvangal)