Shares of Allergan jumped 2.2 percent Wednesday after analysts at Morgan Stanley downplayed concern over competitive pressure for its key product, Botox.
"Fears about a 'better Botox' may be overdone," said analyst David Risinger in a note to clients. He noted that it "could be difficult" for competitor Revance Therapeutics to show that its Botox-like product, botulinum toxin RT002, "is materially longer-lasting than Botox, which has been a concern for AGN investors."
Allergan shares are down 23 percent over the past three months, while Revance's stock is up 7.4 percent in that time period.
But Morgan Stanley upgraded the stock to overweight from equal weight and maintained its $200 per share price target, which is 16.3 percent higher than Tuesday's closing price.
"We also think that mechanistically it would be difficult to create a significantly longer-lasting Botox because botulinum toxin gradually loses efficacy over four months due to neuronal regeneration," Risinger said. "If we are correct, … AGN shares could benefit."
— CNBC's Michael Bloom contributed to this report.