Allergan: Women's Health divestiture is a realistic strategic move, reiterate Neutral - Mizuho (162.27)
Mizuho notes Allergan may be undertaking a sale of the Women's Health business if it has lowered its expectations around Esmya approval in fibroids, especially after recent liver toxicity concerns in EU (and product withdrawal from the market) and its delayed PDUFA date. Their valuation target is just below $5B. Without this *star*, the rest of the Women's Health franchise no longer meets the company's market leadership criteria, and selling the unit could be a solid de-levering move. They think investors were hoping for an outright company sale following the CEO's comments at a recent conference, so we think that this smaller sale could be initially disappointing. With a number of competitive overhangs on Allergan's Botox business, they think selling the entire co outright could prove to be more time consuming and challenging. However, selling the division could be a productive first step