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Allergan Reports First Quarter 2010 Operating Results

  • Board of Directors Declares First Quarter Dividend

IRVINE, Calif.--(BUSINESS WIRE)--Apr 30, 2010 - Allergan, Inc. (NYSE: AGN) today announced operating results for the quarter ended March 31, 2010. Allergan also announced that its Board of Directors has declared a first quarter dividend of $0.05 per share, payable on June 8, 2010 to stockholders of record on May 18, 2010.

Operating Results Attributable to Stockholders

For the quarter ended March 31, 2010:

 

  • Allergan reported $0.55 diluted earnings per share attributable to stockholders compared to $0.15 diluted earnings per share attributable to stockholders for the first quarter of 2009.
  • Allergan reported $0.65 non-GAAP diluted earnings per share attributable to stockholders compared to $0.55 non-GAAP diluted earnings per share attributable to stockholders for the first quarter of 2009, an 18.2 percent increase.

Product Sales

For the quarter ended March 31, 2010:

 

  • Allergan reported $1,105.8 million total product net sales. Total product net sales increased 11.2 percent compared to total product net sales in the first quarter of 2009. On a constant currency basis, total product net sales increased 6.9 percent compared to total product net sales in the first quarter of 2009.
    • Total specialty pharmaceuticals net sales increased 9.7 percent, or 5.6 percent on a constant currency basis, compared to total specialty pharmaceuticals net sales in the first quarter of 2009.
    • Total medical devices net sales increased 18.4 percent, or 13.4 percent on a constant currency basis, compared to total medical devices net sales in the first quarter of 2009.

“During the first quarter, Allergan continued to actively expand its product portfolio and geographic reach through business development activities and the attainment of important regulatory approvals,” said David E.I. Pyott, Allergan's Chairman of the Board and Chief Executive Officer. “In addition, we delivered strong operating results as we benefited from the increasing strength of our cash pay businesses.”

Product and Pipeline Update

During the first quarter of 2010:

 

  • On January 7, 2010, Allergan received marketing authorization from The European Commission for LUMIGAN® (bimatoprost ophthalmic solution) 0.01% which applies to the 27 countries of the European Union.
  • On February 1, 2010, Allergan announced U.S. Food and Drug Administration (FDA) approval of JUVÉDERM® XC dermal filler formulated with lidocaine to provide patients with enhanced comfort during treatment of moderate to severe facial wrinkles and folds, such as the nasolabial folds (or “parentheses”) that appear around the nose and mouth.
  • On March 3, 2010, Bristol-Myers Squibb Company and Allergan announced a global agreement for the development and commercialization of AGN-209323, a Phase II-ready, orally administered small molecule in clinical development for neuropathic pain.
  • On March 9, 2010, Allergan announced the fifth therapeutic FDA approval of BOTOX® (onabotulinumtoxinA), for the treatment of increased muscle stiffness in the elbow, wrist and fingers in adults with upper limb spasticity.
  • On March 9, 2010, Allergan and Glaxo Group Limited (“Glaxo”), an affiliate of GlaxoSmithKline plc, entered into amendments to their existing license agreements, dated September 30, 2005, for the development and sale of BOTOX® in Japan and China. Under the amendments, Allergan reacquired the rights to develop and sell BOTOX® in Japan and China for all current and future cosmetic indications. Glaxo retains the rights granted under the license agreements to develop and sell BOTOX® in Japan and China for all current and future therapeutic indications.
  • Allergan completed its acquisition of Serica Technologies, Inc., a medical device company focused on the development of biodegradable silk-based scaffolds for use in tissue regeneration, including breast augmentation, revision and reconstruction and bariatric applications.

Following the end of the first quarter of 2010:

 

  • On April 1, 2010, Allergan and Serenity Pharmaceuticals, LLC announced a global agreement, entered into on March 31, 2010, for the development and commercialization of Ser-120, a Phase III investigational drug currently in clinical development for the treatment of nocturia, a common yet often under-diagnosed urological disorder in adults characterized by frequent urination at night time.
  • Allergan entered into an agreement with its distributor in Turkey that will allow Allergan to establish direct operations in Turkey beginning in the second quarter of 2010, subject to clearance by the Turkish Competition Authority.

Outlook

For the full year of 2010:

 

  • Allergan is adjusting its expectations for non-GAAP diluted earnings per share attributable to Allergan, Inc. stockholders to between $3.11 and $3.15, which includes the estimated impact of U.S. healthcare reform legislation.
  • Allergan is adjusting its expectations for the effective tax rate on non-GAAP earnings to approximately 28%.
  • All other expectations provided on February 4, 2010 remain unchanged.

For the second quarter of 2010, Allergan expects:

 

  • Total product net sales between $1,190 million and $1,230 million.
  • Non-GAAP diluted earnings per share attributable to stockholders between $0.79 and $0.81, which includes the estimated impact of U.S. healthcare reform legislation.

In this press release, Allergan reported historical non-GAAP earnings attributable to Allergan, Inc., non-GAAP basic and diluted earnings per share attributable to Allergan, Inc. stockholders as well as non-GAAP other revenues, non-GAAP cost of sales, non-GAAP selling, general and administrative expenses, non-GAAP research and development expenses, non-GAAP amortization of acquired intangible assets, non-GAAP restructuring charges, non-GAAP interest expense, non-GAAP other, net, non-GAAP provision for income taxes, non-GAAP net earnings and non-GAAP net sales reported in constant currency as well as expectations for non-GAAP diluted earnings per share attributable to Allergan, Inc. stockholders. Each of these non-GAAP financial measures is reconciled to the most directly comparable GAAP financial measure in the financial tables of this press release and the accompanying footnotes.

Forward-Looking Statements

In this press release, the statements regarding product development, market potential, expected growth, regulatory approvals, the statements by Mr. Pyott as well as Allergan's earnings per share, product net sales, revenue forecasts and any other statements that refer to Allergan's expected, estimated or anticipated future results, 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 the end of the applicable reporting period. 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.

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 the following: changing competitive, market and regulatory conditions; the timing and uncertainty of the results of both the R&D and regulatory processes; domestic and foreign health care and cost containment reforms, including government pricing, tax 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 continued economic volatility, 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 2009 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.

® Marks owned by Allergan, Inc.

JUVÉDERM® mark owned by Allergan Industrie SAS

           
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, 2010       March 31, 2009
                Non-GAAP                       Non-GAAP

 

       
        GAAP

 

      Adjustments

 

      Non-GAAP

 

      GAAP

 

      Adjustments

 

      Non-GAAP

 

Revenues                                                  
Product net sales       $ 1,105.8         $ --         $ 1,105.8         $ 994.6         $ --         $ 994.6  
Other revenues         48.9           (36.0 )(a)         12.9           12.6           --           12.6  
          1,154.7           (36.0 )         1,118.7           1,007.2           --           1,007.2  
                                                   
Operating costs and expenses                                                  
Cost of sales (excludes amortization of acquired intangible assets)

 

        170.2

 

          --

 

          170.2

 

          177.8

 

          (9.4 )(k)(l)         168.4

 

 
Selling, general and administrative         473.8           (5.5 )(b)(c)(d)(e)         468.3           484.5         (61.7

 

)(k)(m)(n)

 

        422.8  
Research and development         222.7           (43.0 )(e)         179.7           182.1           (20.4 )(k)(l)         161.7  
Amortization of acquired intangible assets         37.1           (31.4 )(f)         5.7           38.6           (33.1 )(f)         5.5  
Restructuring charges         0.6           (0.6 )(g)         --           42.1           (42.1 )(g)         --  
                                                   
Operating income         250.3           44.5           294.8           82.1           166.7           248.8  
                                                   
Non-operating income (expense)                                                  
Interest income         1.3           --           1.3           2.7           --           2.7  
Interest expense         (16.6 )         6.1

 

(h)

 

        (10.5 )         (19.4 )         6.5

 

(h)

 

        (12.9 )
Other, net         (3.0 )         0.7

 

(i)

 

        (2.3 )         (2.0 )       8.1

 

(o)(p)

 

        6.1  
          (18.3 )         6.8           (11.5 )         (18.7 )         14.6           (4.1 )
                                                   
Earnings before income taxes         232.0           51.3           283.3           63.4           181.3           244.7  
                                                   
Provision for income taxes         63.0           19.4

 

(j)

 

        82.4           18.4         57.6

 

(q)

 

        76.0  
                                                   
Net earnings         169.0           31.9           200.9           45.0                          

Posted: April 2010


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