A major Allergan pipeline candidate may have failed phase 3 on Wednesday, but investors cheered the news. The reason? They’re anticipating a split.

As the Dublin drugmaker’s shareholders told Leerink Partners analyst Marc Goodman ahead of the trial results—which saw depression prospect rapastinel flunk three phase 3 studies—if rapastinel came up short, "there could be (and should be) increased pressure on management and/or the Board to implement some type of change."

Enthusiasm for that change is likely what drove Allergan shares higher Thursday after an initial Wednesday dip. "We wouldn’t be surprised to see the stock higher over the next week in anticipation," Goodman wrote to clients.

Just what kind of change are investors after? One that unlocks "the value of the aesthetics business amidst the pharma business (which has had a few years of underperformance: on the patent side on base biz and on pipeline productivity)," Evercore ISI analyst Umer Raffat wrote in his own investor note. In other words, the kind of breakup RBC Capital Markets analyst Randall Stanicky has been advocating since 2017.

"This will now likely revert focus back to the strategic pathway that AGN is currently on which we do not think is working," Stanicky predicted.

Allergan initially resisted the break-up idea in favor of cost-cutting measures, but when those didn’t boost shares, it consented to explore sales of its women’s health and infectious disease units. The thing is, in the wake of an FDA rejection for Esmya, it couldn’t find anyone to take women’s health, and it ultimately called off the sale process.

Meanwhile, some investors have gotten tired of waiting around for change. Activist Appaloosa has been lobbying a split of the CEO and Chairman’s roles—both currently held by Brent Saunders—since last year, and recently John Chevedden joined in the chorus.

Now that rapastinel isn’t going anywhere, "we expect greater focus on strategic actions with activist push likely to continue to heighten" before the company’s May 1 shareholder meeting, Stanicky wrote.

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