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Allergan stock jumps 3.8% after Evercore ISI analyst says company is likely heading toward a split

Sarah Toy

Shares of Allergan Plc shot up 3.8% Tuesday afternoon after Evercore ISI analyst Umer Raffat said a call with the drugmaker's general counsel left him "with the sense that Allergan is heading towards a split and may likely lay out timelines." He added in a note to clients that he thinks the company will give an update in the next couple of months. Analysts have long called for a split and activist investors have long pushed for the company to also separate out its chairman and chief executive roles, which are both held by Brent Saunders. Allergan has been dealing with some significant issues in the past year -- investors are worried about the future of Botox, the company's biggest earner, as it faces competition in the anti-wrinkle and injectable migraine treatment markets. Investors were also rattled by the failure of depression drug rapastinel -- once considered by many to be Allergan's next big blockbuster drug -- in clinical trials earlier this year. In May, Saunders said he had heard investors' concerns "loud and clear," adding that "everything is on the table," including the possibility of splitting the company up. Shares of Allergan have fallen 10.6% in the year to date, while the S&P 500 has gained 16.4%.