Brent Saunders on Wednesday accepted accountability for Allergan's (AGN) earnings miss, but also reiterated that for the drugmaker, buying back stock will take precedence over acquisitions as its most accretive driver after the six tuck-in deals announced in its third quarter raised concern among some investors.
The CEO told investors on a conference call that he takes "personal responsibility" for widely missing the company's third-quarter earnings target.
"In fairness, it's something that frankly under my leadership we've never had," Saunders said, adding that while the miss is disappointing, "the business is not less predictable in any way, shape or form."
Saunders went on to say that Allergan had a lot going on in the wake of its continued transformation, and it didn't anticipate the sales declines of products facing competition from generics, including its Alzheimer's treatment Namenda. Allergan's Asacol and its replacement product Delzicol, which are used to treat ulcerative colitis, represented another franchise that suffered from generic competition.
The Dublin-headquartered company posted earnings per share of $3.32 over the quarter, falling 24 cents short of FactSet's consensus of $3.56 a piece. Sales during the period also came in lower than expected at $3.62 billion, as opposed to expectations of $3.67 billion.
Allergan also guided down its full-year earnings-per-share estimate to a midpoint of $13.40, from $13.98.
Allergan presented some good news, too. The company not only bolstered its share buyback program by $5 billion to $15 billion, but also issued its first every quarterly dividend of 70 cents.