September 25, 2017 / 11:50 AM / 23 days ago

Allergan boosts shares with $2 billion buyback

The Allergan logo is seen in this photo illustration November 23, 2015. REUTERS/Thomas White/Illustration/File Photo

(Reuters) - 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.

Allergan shares have fallen by around a fifth in value since late July but were up nearly 4 percent in morning trading on Monday.

The company also said its Chief Financial Officer Tessa Hilado, 53, would retire.

The planned stock buyback follows Allergan’s completion of a separate $15 billion repurchase, and after the company reported mixed trial data for its experimental treatment of NASH liver fibrosis.

Allergan on Friday also received a “refusal to file” letter from the U.S. Food and Drug Administration for an expanded approval for its Vraylar drug to treat symptoms associated with schizophrenia in adults.

Allergan said it had begun to search for a new finance chief, but declined to provide further comment on Hilado’s departure.

Analysts at Bernstein, based on discussions with Allergan’s investor relations team, said Hilado’s departure was her personal decision and should not be viewed as suggesting “issues this year or 2018.”

Hilado did not have broad support among Allergan investors and her exit would not be a “particularly strong negative,” they added.

Hilado joined Allergan in 2014 and will continue in her current role until a successor is named.

Allergan, which said it was committed to boosting its dividend payout annually, also backed its 2017 financial guidance and its commitment to pay down $3.75 billion of debt in 2018.

The drugmaker had $30.24 billion in current and long-term debt and capital leases as of June 30.

“While the CFO’s departure may create greater uncertainty, we take the company’s reaffirmation of 2017 guidance and third quarter revenue projections as offsetting positives,” Wells Fargo analyst David Maris said.

Reporting by Manas Mishra and Ankur Banerjee in Bengaluru; Editing by Sai Sachin Ravikumar

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