(Reuters) - Allergan Plc (AGN.N), taking a more “realistic” approach to its forecast, said on Thursday it expects mid-single digit net revenue percentage growth this year, helped by key products and new launches.
Chief Executive Brent Saunders said that Allergan was now moving away from “aspirational goals”.
Allergan, which has snapped up a number of smaller drugmakers since its planned $160 billion merger with Pfizer Inc (PFE.N) collapsed in April, reported disappointing quarterly earnings in November and cut its 2016 forecast.
“This is an important step in setting appropriate expectations,” RBC Capital Markets analyst Randall Stanicky said.
Mizuho Securities USA analyst Irina Koffler also noted that Allergan’s guidance serves as a realistic baseline that should prevent last year’s unexpected disappointments.
The company, which promised it would limit its price increases to 10 percent in September as part of a “social contract”, is not planning to have another round of hikes in June, Saunders said at the Goldman Sachs healthcare conference on Thursday.
Drug pricing has become a lightning rod for criticism with several drugmakers coming under federal investigation for price gouging.
Saunders said he did not expect his peers to subscribe to this policy, but was encouraged by what he had seen so far.
“It seems the industry is taking pricing seriously.”
The company, best known for Botox, sold its Actavis generics business to Teva Pharmaceutical Industries (TEVA.TA) for $40.5 billion in August, freeing up cash for deals.
Allergan has agreed to 12 deals in 2016, including the $1.7 billion acquisition of Tobira Therapeutics Inc, maker of an experimental treatment for fatty liver disease, and $639 million acquiring Vitae Pharmaceuticals Inc, maker of an experimental drug to treat psoriasis.
Dublin-based Allergan, which will report its fourth-quarter results in February, also said it expects to achieve double-digit adjusted earnings growth in 2017.
“We are not surprised by these conservative expectations as the company is still managing the declines of some of its established products while its newer launches ramp,” Mizuho’s Koffler wrote in a note.
Analysts on average expected 2017 adjusted earnings of $16.04 per share and revenue of $15.31 billion, according to Thomson Reuters I/B/E/S.
Allergan’s 2016 adjusted net revenue from continuing operations is expected to be $14.45 billion-$14.65 billion and adjusted profit $13.30-$13.50 per share.
The company’s shares were marginally up at $217.06. The shares had fallen 36 percent last year.
Reporting by Ankur Banerjee and Natalie Grover in Bengaluru; Editing by Shounak Dasgupta