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Allergan Reports First Quarter 2009 Operating Results

  • Board of Directors Declares First Quarter Dividend

IRVINE, Calif.--(BUSINESS WIRE)--May 1, 2009 - Allergan, Inc. (NYSE: AGN) today announced operating results for the quarter ended March 31, 2009. Allergan also announced that its Board of Directors has declared a first quarter dividend of $0.05 per share, payable on June 8, 2009 to stockholders of record on May 18, 2009.

Operating Results Attributable to Stockholders

For the quarter ended March 31, 2009:

  • Allergan reported $0.15 diluted earnings per share attributable to stockholders compared to $0.35 diluted earnings per share reported for the first quarter of 2008.
  • Allergan's non-GAAP diluted earnings per share attributable to stockholders were $0.55 in the first quarter of 2009, compared to non-GAAP diluted earnings per share of $0.53 in the first quarter of 2008, a 3.8 percent year-over-year increase.

Product Sales

For the quarter ended March 31, 2009:

  • Allergan's total product net sales were $994.6 million. Total product net sales decreased 6.3 percent as compared to total product net sales in the first quarter of 2008. On a constant currency basis, total product net sales decreased 0.4 percent compared to total product net sales in the first quarter of 2008.
    • Total specialty pharmaceuticals net sales decreased 3.6 percent as compared to total specialty pharmaceuticals net sales in the first quarter of 2008. On a constant currency basis, total specialty pharmaceuticals net sales increased 2.3 percent compared to total specialty pharmaceuticals net sales in the first quarter of 2008.
    • Total medical devices net sales decreased 17.6 percent, or 11.6 percent at constant currency, compared to total medical devices net sales in the first quarter of 2008.

“Our focused approach to the management of our costs as well as our businesses has once again allowed us to deliver solid financial results for the first quarter of 2009,” said David E.I. Pyott, Allergan's Chairman of the Board and Chief Executive Officer. “Furthermore, we are making excellent progress in our launch efforts for LATISSE™ (bimatoprost ophthalmic solution) 0.03% and are very pleased with the positive feedback we have received thus far from the market.”

Product and Pipeline Update

During the first quarter of 2009:

  • GlaxoSmithKline received approval of BOTOX® (botulinum toxin type A) for the treatment of glabellar lines and equinus foot due to lower limb spasticity in juvenile cerebral palsy patients in Japan. GlaxoSmithKline also received approval of BOTOX® for the treatment of glabellar lines in China.
  • Allergan's New Drug Application seeking approval of POSURDEX® for macular edema associated with retinal vein occlusion was granted priority review status by the U.S. Food and Drug Administration (FDA).

Following the end of the first quarter of 2009:

  • Allergan received approval of LUMIGAN® (bimatoprost ophthalmic solution) 0.01% for the reduction of elevated intraocular pressure in patients with open angle glaucoma or ocular hypertension in Canada.
  • Allergan commented on FDA requested class labeling for botulinum toxin treatments.

Outlook

For the full year of 2009:

  • All guidance provided on February 4, 2009 remains unchanged.

For the second quarter of 2009, Allergan estimates:

  • Total product net sales between $1,050 million and $1,100 million.
  • Non-GAAP diluted earnings per share attributable to stockholders guidance between $0.66 and $0.68.

On January 1, 2009, Allergan adopted Financial Accounting Standards Board Staff Position APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (FSP APB 14-1), which requires retrospective application to prior periods. The impact from the adoption of this accounting rule on the previously reported GAAP results for the first quarter of 2008 was a reduction of diluted earnings per share attributable to stockholders of $0.01 from the amount previously reported. Non-GAAP diluted earnings per share attributable to stockholders for the first quarter of 2008 were not impacted.

Historical non-GAAP diluted earnings per share and guidance amounts for non-GAAP diluted earnings per share, non-GAAP cost of sales, non-GAAP selling, general and administrative expenses, non-GAAP research and development expenses, and effective tax rate on non-GAAP earnings as well as net sales reported in constant currency are presented as non-GAAP financial measures. A reconciliation of those measures to the most directly comparable GAAP financial measure is included in the financial tables of this press release. The reconciliation for the guidance amounts in the financial tables includes historical non-GAAP adjustments and an estimate of the future effect from amortization of acquired intangible assets and non-cash interest expense associated with amortization of convertible debt discount.

All prior period information in the financial tables of this press release has been retrospectively revised due to the adoptions of FSP APB 14-1 and Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51.

Forward-Looking Statements

In this press release, the statements regarding product development, market potential, expected growth, anticipated product filings and approvals, the statements by Mr. Pyott as well as the outlook for the state of the economy, Allergan's earnings per share, product net sales, revenue forecasts, future investment allocations, restructuring benefits or outcomes and any other future performance, among other statements above, are forward-looking statements. Because forecasts are inherently estimates that cannot be made with precision, Allergan's performance at times differs materially from its estimates and targets, and Allergan often does not know what the actual results will be until after a quarter's end and year's end. Therefore, Allergan will not report or comment on its progress during a current quarter except through public announcement. Any statement made by others with respect to progress during a current quarter cannot be attributed to Allergan.

Any other statements in this press release that refer to Allergan's expected, estimated or anticipated future results are forward-looking statements. All forward-looking statements in this press release reflect Allergan's current analysis of existing trends and information and represent Allergan's judgment only as of the date of this press release. Actual results may differ materially from current expectations based on a number of factors affecting Allergan's businesses, including, among other things, changing competitive, market and regulatory conditions; the timing and uncertainty of the results of both the research and development and regulatory processes; domestic and foreign health care and cost containment reforms, including government pricing and reimbursement policies; technological advances and patents obtained by competitors; the performance, including the approval, introduction, and consumer and physician acceptance of new products and the continuing acceptance of currently marketed products; the effectiveness of advertising and other promotional campaigns; the timely and successful implementation of strategic initiatives; the results of any pending or future litigation, investigations or claims; the uncertainty associated with the identification of and successful consummation and execution of external corporate development initiatives and strategic partnering transactions; and Allergan's ability to obtain and successfully maintain a sufficient supply of products to meet market demand in a timely manner. In addition, U.S. and international economic conditions, including higher unemployment, financial hardship, consumer confidence and debt levels, taxation, changes in interest and currency exchange rates, international relations, capital and credit availability, the status of financial markets and institutions, as well as the general impact of the current economic crisis, can materially affect Allergan's results. Therefore, the reader is cautioned not to rely on these forward-looking statements. Allergan expressly disclaims any intent or obligation to update these forward-looking statements except as required to do so by law.

Additional information concerning the above-referenced risk factors and other risk factors can be found in press releases issued by Allergan, as well as Allergan's public periodic filings with the Securities and Exchange Commission, including the discussion under the heading “Risk Factors” in Allergan's 2008 Form 10-K. Copies of Allergan's press releases and additional information about Allergan is available at www.allergan.com or you can contact the Allergan Investor Relations Department by calling 714-246-4636.

About Allergan, Inc.

Founded in 1950, Allergan, Inc., with headquarters in Irvine, California, is a multi-specialty health care company that discovers, develops and commercializes innovative pharmaceuticals, biologics and medical devices that enable people to live life to its greatest potential – to see more clearly, move more freely, express themselves more fully. The Company employs more than 8,000 people worldwide and operates state-of-the-art R&D facilities and world-class manufacturing plants. In addition to its discovery-to-development research organization, Allergan has global marketing and sales capabilities with a presence in more than 100 countries.

® and ™ Marks owned by Allergan, Inc.

     
     
ALLERGAN, INC.

Condensed Consolidated Statements of Earnings and

Reconciliation of Non-GAAP Adjustments

(Unaudited)

 

     
    Three months ended
In millions, except per share amounts

 

  March 31, 2009     March 31, 2008
         

 

             

 

   
    GAAP   Non-GAAP Adjustments

 

  Non-GAAP     GAAP   Non-GAAP Adjustments

 

  Non-GAAP
Revenues                          
Product net sales   $ 994.6     $ --     $ 994.6       $ 1,061.0     $ --     $ 1,061.0  
Other revenues     12.6       --       12.6         15.6       --       15.6  
      1,007.2       --       1,007.2         1,076.6       --       1,076.6  
                           
Operating costs and expenses                          
Cost of sales (excludes amortization of acquired intangible assets)

 

    177.8

 

      (9.4

 

)(a)(c)

 

    168.4

 

        182.2

 

      (6.7 )(k)     175.5

 

 
Selling, general and administrative     484.5       (61.7 )(a)(b)(d)     422.8         482.2       (1.2 )(l)(m)     481.0  
Research and development     182.1       (20.4 )(a)(c)     161.7         182.9       (0.1 )(m)     182.8  
Amortization of acquired intangible assets     38.6       (33.1 )(e)     5.5         34.9       (29.9 )(e)     5.0  
Restructuring charges     42.1       (42.1 )(f)     --         28.4       (28.4 )(f)     --  
                           
Operating income     82.1       166.7       248.8         166.0       66.3       232.3  
                           
Non-operating income (expense)                          
Interest income     2.7       --       2.7         11.2       --       11.2  
Interest expense     (19.4 )     6.5

 

(g)

 

    (12.9 )       (21.5 )     6.1

 

(g)

 

    (15.4 )
Unrealized loss on derivative instruments, net

 

    (2.8

 

)

 

    2.8

 

(h)

 

    --

 

        (3.3

 

)

 

    3.3

 

(h)

 

    --

 

 
Other, net     0.8       5.3

 

(i)

 

    6.1         (2.9 )     --       (2.9 )
      (18.7 )     14.6       (4.1 )       (16.5 )     9.4       (7.1 )
                           
Earnings before income taxes     63.4       181.3       244.7         149.5       75.7       225.2  
                           
Provision for income taxes     18.4       57.6

 

(j)

 

    76.0         41.6       20.5

 

(j)

 

    62.1  
                           
Net earnings     45.0       123.7       168.7         107.9       55.2       163.1  
                           
Net earnings attributable to noncontrolling interest     0.3       --       0.3         0.2       --

 

      0.2  
                           
Net earnings attributable to Allergan, Inc.   $ 44.7     $ 123.7     $ 168.4       $ 107.7     $ 55.2     $ 162.9  
                           
Net earnings per share attributable to Allergan, Inc. stockholders:                          
Basic   $                                            

Posted: May 2009


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