A Big Upgrade for Allergan

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In addition to following professional banks, anyone can use Motley Fool CAPS to monitor the collective opinions of more than 115,000 members, many of whom demonstrate better investing insight than published analysts do.

Enough top-performing CAPS investors have turned bullish on Allergan (NYSE: AGN  ) recently to upgrade it from its four-star rank to a top-of-the-class five-stars. A total of 280 investors have given their opinion on Allergan, with many of them offering analysis and commentary explaining the recent optimism.

Botox maker Allergan has returned to its former glory, recapturing five-star status after dropping as low as three stars. Allergan’s long list of competitors includes Merck (NYSE: MRK  ) , Pfizer (NYSE: PFE  ) , and Johnson & Johnson (NYSE: JNJ  ) , but the company has found a good niche in cosmetic drugs like Botox. Similar to Amgen's (Nasdaq: AMGN  ) Epogen, Botox once started off with orphan drug designation, but now the wrinkle treatment is seeing strong adoption internationally. In the second quarter, Botox sales grew 13%, contributing to a 20% rise in revenue overall to $1.17 billion.

Recent forays into different sectors of the medical aesthetics market also have investors handicapping new revenue opportunities for Allergan. Eyeing the $3.7 billion mascara market dominated by the likes of Revlon and Estee Lauder (NYSE: EL  ) , Allergan is developing a compound, bimatoprost, that will actually grow eyelashes longer. In a separate move, the company purchased the rights to QLT's (Nasdaq: QLTI  ) acne drug Aczone for $150 million in cash, hoping to capture as much of the $800 million prescription acne treatment market as it can until the patents for Aczone start to expire in 2016. With new potential blockbuster treatments on the horizon, nearly 93% of the CAPS members rating Allergan expect it to outperform the market.

To see what the very best CAPS members are saying now about Allergan -- as well as other winning stocks they are picking -- head on over to CAPS and have a look.

More Foolishness:

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Fool contributor Dave Mock recently upgraded his Pez dispenser with cherry flavor. He owns shares of Pfizer and Johnson & Johnson and is the author of The Qualcomm Equation. Pfizer is also an Inside Value recommendation. The Fool's disclosure policy holds the world's largest collection of bobble-heads.


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