Allergan posts loss as it writes down Teva holdings
By Michael Erman and Natalie Grover
(Reuters) - Botox-maker Allergan Plc (AGN.N: Quote) posted a first-quarter loss on Tuesday as it took a nearly $2 billion write-down on the value of its stake in Teva Pharmaceutical Industries (TEVA.TA: Quote), which has lost more than 40 percent of its value since last year.
Allergan sold its generics business Actavis to Teva in August 2016 for $33 billion in cash and 100 million shares of the Israeli generic drugmaker, worth around $5.3 billion at the time. Under the terms of the deal, Allergan agreed to hold on to the shares for at least one year.
Teva has struggled since then, and the company's chief executive stepped down in February after sharp criticism for a string of costly acquisitions and delayed drug launches.
Allergan said its net loss was $2.63 billion, or $7.86 per share, compared with a profit of $186.1 million, or 47 cents per share, a year earlier.
Most of the loss was from the write-down of the Teva stake, as well as research and development related costs.
Allergan said it concluded that Teva's decline was not temporary and took the impairment. Allergan Chief Executive Officer Brent Saunders told an Israeli newspaper earlier this year that the company plans to sell the stake in cooperation with Teva after the lockup period ends.
OPERATING EARNINGS BEAT ESTIMATES Continued...