Allergan says offers undervalue business units for sale, shares fall

By Manas Mishra

(Reuters) - Allergan Plc on Tuesday expressed disappointment in early offers from potential buyers for business units it has been trying to sell, and its shares fell more than 6 percent.

Allergan has been shopping its women's health and infectious disease businesses since May, following a strategic review of the company undertaken in an effort to reverse a steep slide in its share price.

On call with analysts to discuss third quarter results, Chief Executive Officer Brent Saunders said early buyer interest for the units was below the price he believes they are worth.

"These are good businesses, right? We have always said that while we absolutely would like to sell these businesses, we need to make sure that we get the right price given the dilutive effect on a variety of our financial metrics," Saunders said.

It was not immediately clear whether the interest was for the units as a whole or for certain parts.

Shares of the Dublin-based company fell 6.3 percent to $162.91, despite Allergan reporting higher-than-expected third quarter profit.

The Botox maker's plans have been met with investor concerns, including from billionaire shareholder David Tepper's Appaloosa Management, who had said he hoped for a more dramatic outcome from the strategic review.

Sales of Botox powered Allergan's quarterly profit as it maintained dominance in the cosmetic wrinkle treatment market.

Overall Botox sales, which also include medical uses such as treating migraine headaches, jumped 13.6 percent to $879.7 million in the quarter, topping analysts estimates of $847.4 million, according to Refinitiv data.

Sales of the company's dry eye drug, Restasis, fell 18.5 percent to $311.6 million in the quarter. But the decline was not as severe as some investors had feared due to a delay to market of cheaper generic versions of the treatment.

The company said it now expects full-year adjusted earnings of $16.20 to $16.60 per share, compared with its previous forecast of $16.00 to $16.50 per share. The company partly attributed the raise to the delay of Restasis generics.

Once a drug begins facing competition from multiple generic versions, it can quickly lose more than 80 percent of sales.

Excluding items, the company earned $4.25 per share, beating analysts' average estimate by 21 cents, according to Refinitiv data.

Net revenue fell 3 percent to $3.91 billion.

(Reporting by Manas Mishra and Manogna Maddipatla in Bengaluru; Editing by Saumyadeb Chakrabarty and Bill Berkrot)