At first blush, investors appear to be buying into the idea of the company consolidating its business. Shares in Allergan bounced Wednesday on the news and were trading about 0.7% higher to US$152.10.
Allergan shares have lost more than half their value since peaking in July 2015 and have fallen about 13% this year.
CEO Brent Saunders said the pharmaceutical giant will use the proceeds from the sale to reduce debt and buy back shares, cautioning ‘there is no fire sale.’
The drug giant is pursuing a sale of its women's health and infectious diseases businesses after wrapping up its strategic review earlier this year which even weighed in on more drastic options like splitting the company or making acquisitions to boost its sagging stock price.
"There is no fire sale at Allergan," Saunders told the Bernstein Strategic Decisions Conference in New York. "There is no undue pressure to sell them for a bargain basement price."
Saunders said that after the sales, the company would focus on four core businesses: medical aesthetic products such as Botox, central nervous system treatments, eye care and gastrointestinal products.
"We have a very strong pipeline in all those areas. Having a focus on those four areas will make Allergan a more exciting company," Saunders told Reuters in an interview.
Saunders said the decision by the board to shed just those two businesses was unanimous.