Dublin, Ireland-based Actavis plc [NYSE:ACT] - manufacturing, research and development of specialty, generic and biosimilar pharmaceutical products.

Actavis reported Q3 2014 earnings of $3.19 per share, up 52.6% from a year-ago, and revenues increased 83% to $3.7 billion. The results include those from Forest Labs, acquired in July 2014, and Warner Chilcott, acquired in October 2013. Actavis raised its earnings for 2014 to a new range of $6.60 to $6.70 per share from the previous guidance of $6.25 to $6.50 per share on total revenues of about $7 billion.

Product Quarterly Revenue: Actavis has over 1000 products in a wide range of therapeutic categories, including antibiotics, anti-inflammatories, oncology medications, cardiovascular treatments, respiratory products, dermatology products and treatments for central nervous system and metabolic disorders. 

North American Brands revenue increased from $153 million to $1.6 billion, driven by key products including Namenda®, Bystolic®, Linzess®, Lo Loestrin® Fe, Estrace® Cream, Daliresp™ and Tudorza®.

North American Generics revenue was $979.9 million, driven by key products including Lidoderm® and generic Concerta®.

International revenue increased 15% to $660.7 million, consisting of all brands, branded generics, generics and over-the-counter pharmaceutical revenue derived outside North America.

Anda Distribution revenue increased 38% to $423.2 million, compared to $307.1 million Q3 2013. Actavis’ Anda, Inc. Distribution business primarily distributes generic, select brand pharmaceutical products, vaccines, injectables and OTC medicines from more than 200 suppliers to more than 60,000 U.S. locations.

Pending Issues: (i) Activis is transitioning all Namenda IR twice daily tablet patients to Namenda XR® once-daily product. In September 2014, the company was sued by New York Attorney General Eric Schneiderman over claims it is trying to block generic competition by the transition from a twice-daily to once-daily product to maintain high prices. The company is expecting a favorable ruling from the court later in November denying the injunction sought by the New York State Attorney General. (ii) Actavis is in talks to acquire Allergan [NYSE:AGN] for US $60 billion.

Actavis has 16 product candidates in the pipeline at the Phase III or NDA stages of development, including treatments for Alzheimer’s disease, cardiovascular disease, infectious disease, as well as treatments for Schizophrenia and bipolar disorders and treatments for COPD. Five biosimilar products are under development in the Women’s Health and Oncology therapeutic categories.

Actavis is collaborating with Amgen [NASDAQ:AMGN] to develop and commercialize, on a worldwide basis, biosimilar versions of Herceptin®, Avastin®, Rituxan/Mab Thera®, and Erbitux®. The company is also collaborating with privately held Itero Biopharmaceuticals to develop a recombinant follicle stimulating hormone (rFSH) product, as a biosimilar molecule for the treatment of female infertility.

From March to August 2014, a cup-and-handle chart pattern emerged. Since then, the stock has been moving upward within a rising wedge pattern. A rising wedge break out could happen if there is an announcement of the takeover deal of Allergan, at $200 per share, and/or a favorable ruling from the court later in November regarding the Namenda IR case. The upper trading range of ACT is between $280 and $290.

DISCLOSURE: Long position