According to Reuters News, “U.S. drugmaker Allergan Plc (AGN.N) on Monday authorized a $2 billion buyback of its common stock, sending its shares up after a week of disappointing news on its drug development pipeline.” The news could not have come too soon for Allergen, who’s stock was walloped last week.
Allergan shares have fallen by around a fifth in value since late July but were up nearly 4 percent in morning trading on Monday.
Despite the recovery this morning, Allergan’s underlying issues have not gone away. Reuters reports that CFO Tessa Hilado announced her retirement and that the USDA issued a “refusal to file” for “expanded approval for its Vraylar drug to treat symptoms associated with schizophrenia in adults.” With the company’s future products in danger of being shelved, investors’ confidence will likely stay shaken.
However, the buyback does give the company some additional control and sell-able assets to help mitigate any further issues. However, investors should keep an eye on the situation to ensure that the company doesn’t fall back into a decline should more bad news emerge.
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