Appaloosa again pushes for Allergan to make management changes
Shares of Dublin-based Allergan Plc rose 0.8% on Tuesday morning after hedge-fund firms Appaloosa LP reiterated its calls for the drug company to separate its CEO and chairman roles. The firm had previously asked the board to separate the roles in separate letters sent in April, May and June. The CEO and chairman roles are currently held by Brent Saunders. "In the wake of last Tuesday's earnings call (and market reaction) it should by now be readily apparent to all interested and responsible parties that Allergan requires a fresh approach to its business strategy and an unbiased review of its capabilities, opportunities, and way forward," the firm wrote in a public letter to the company. Allergan swung to a loss in the fourth quarter and offered guidance for 2019 that fell short of Wall Street estimates. The company said it was weighed down by $5.4 billion of impairment charges in the fourth quarter, reflecting $1.9 billion of intangible asset impairments, including $1.6 billion for double-chin treatment Kybella/Belkyra due to declining sales forecasts. Allergan also said its planned sale of anti-infectives and its increased cost of capital based on market dynamics and other commercial factors prompted a review of its general medicine reporting unit goodwill, resulting in the company writing off $3.5 billion of total goodwill. Shares of Allergan have gained 3.5% in the year to date, while the S&P 500 has gained 8.9%.
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