Allergan Reports Fourth Quarter 2010 Operating Results

  • Board of Directors Declares Fourth Quarter Dividend
IRVINE, Calif.--(BUSINESS WIRE)--Feb 2, 2011 - Allergan, Inc. (NYSE: AGN) today announced operating results for the quarter ended December 31, 2010. Allergan also announced that its Board of Directors has declared a fourth quarter dividend of $0.05 per share, payable on March 11, 2011 to stockholders of record on February 18, 2011.

Operating Results Attributable to Stockholders

For the quarter ended December 31, 2010:

  • Allergan reported $0.85 diluted earnings per share attributable to stockholders compared to $0.72 diluted earnings per share attributable to stockholders for the fourth quarter of 2009.
  • Allergan reported $0.88 non-GAAP diluted earnings per share attributable to stockholders compared to $0.78 non-GAAP diluted earnings per share attributable to stockholders for the fourth quarter of 2009, a 12.8 percent increase.
Product Sales

For the quarter ended December 31, 2010:

  • Allergan reported $1,290.1 million total product net sales. Total product net sales increased 6.9 percent compared to total product net sales in the fourth quarter of 2009. On a constant currency basis, total product net sales increased 7.4 percent compared to total product net sales in the fourth quarter of 2009.
    • Total specialty pharmaceuticals net sales increased 6.9 percent, or 7.3 percent on a constant currency basis, compared to total specialty pharmaceuticals net sales in the fourth quarter of 2009.
    • Total medical devices net sales increased 7.1 percent, or 7.9 percent on a constant currency basis, compared to total medical devices net sales in the fourth quarter of 2009.
“We are very pleased with our fourth quarter and full year results, as well as the record number of regulatory approvals secured in 2010,” said David E.I. Pyott, Allergan's Chairman of the Board and Chief Executive Officer. “In 2011, we look forward to marketing the new products and therapies approved in 2010, as well as investing in R&D to reload our pipeline.”

Based on internal information and assumptions, full year 2010 therapeutic sales accounted for approximately 51% of total BOTOX® (onabotulinumtoxinA) sales and increased approximately 6% compared to 2009. Full year 2010 cosmetic sales accounted for approximately 49% of total BOTOX® sales and increased approximately 11% compared to 2009.

Product and Pipeline Update

During the fourth quarter of 2010:

  • On October 15, 2010, Allergan announced that the United States Food and Drug Administration (FDA) approved BOTOX® (onabotulinumtoxinA) for the prophylactic treatment of headaches in adults with chronic migraine, a distinct and severe neurological disorder characterized by patients who have a history of migraine and suffer from headaches on 15 or more days per month with headaches lasting four hours a day or longer.
  • Allergan filed a supplemental Biologics License Application (sBLA) with the FDA for the use of BOTOX® in the treatment of urinary incontinence due to neurogenic detrusor overactivity resulting from neurogenic bladder.
  • On December 3, 2010, Allergan announced that the FDA Gastroenterology and Urology Devices Panel of the Medical Devices Advisory Committee recommended with an 8-2 vote that the FDA extend the currently approved use of the LAP-BAND® System, Allergan's gastric band, on the basis of a favorable benefit-risk profile for weight reduction in obese adults who have failed more conservative weight reduction alternatives and have a Body Mass Index (BMI) of at least 35 or a BMI greater than 30 and at least one comorbid condition.
Following the end of the fourth quarter of 2010:
  • On January 31, 2011, Allergan and MAP Pharmaceuticals, Inc. announced a collaboration within the United States for LEVADEX™, a self-administered, orally inhaled therapy that has completed Phase III clinical development for the treatment of acute migraine in adults. MAP Pharmaceuticals currently anticipates submitting its New Drug Application for LEVADEX™ with the FDA in the first half of 2011.
Outlook

For the full year of 2011, Allergan expects:

  • Total product net sales between $5,020 million and $5,220 million.
    • Total specialty pharmaceuticals net sales between $4,160 million and $4,300 million.
    • Total medical devices net sales between $860 million and $920 million.
    • ALPHAGAN® franchise product net sales between $380 million and $400 million.
    • LUMIGAN® franchise product net sales between $550 million and $580 million.
    • RESTASIS® product net sales between $680 million and $710 million.
    • BOTOX® product net sales between $1,490 million and $1,540 million.
    • LATISSE® product net sales at approximately $100 million.
    • Breast aesthetics product net sales between $330 million and $350 million.
    • Obesity intervention product net sales between $220 million and $240 million.
    • Facial aesthetics product net sales between $310 million and $330 million.
  • Non-GAAP cost of sales to product net sales ratio at approximately 14.5%.
  • Non-GAAP other revenue at approximately $50 million.
  • Non-GAAP selling, general and administrative expenses to product net sales ratio between 38% and 39%.
  • Non-GAAP research and development expenses to product net sales ratio at approximately 16%.
  • Non-GAAP amortization of acquired intangible assets at approximately $20 million. This expectation excludes the amortization of certain acquired intangible assets associated with business combinations, asset purchases and product licenses.
  • Non-GAAP diluted earnings per share attributable to stockholders between $3.54 and $3.60.
  • Diluted shares outstanding at approximately 309 million.
  • Effective tax rate on non-GAAP earnings at approximately 28%.
For the first quarter of 2011, Allergan expects:
  • Total product net sales between $1,170 million and $1,220 million.
  • Non-GAAP diluted earnings per share attributable to stockholders between $0.71 and $0.73.
In this press release, Allergan reports certain historical and expected non-GAAP results, including earnings attributable to Allergan, Inc., non-GAAP basic and diluted earnings per share attributable to 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 legal settlement, non-GAAP intangible asset impairment and related costs, non-GAAP restructuring charges, non-GAAP interest expense, non-GAAP gain on investments, net, non-GAAP other, net, non-GAAP earnings before income taxes, non-GAAP provision for income taxes, non-GAAP net earnings and non-GAAP net sales reported in constant currency. Non-GAAP financial measures are 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 research and development 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 Form 10-K for the fiscal year ended December 31, 2009 and Form 10-Q for the quarters ended March 31, 2010, June 30, 2010 and September 30, 2010. 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.

Allergan, Inc. is a multi-specialty health care company established 60 years ago with a commitment to uncover the best of science and develop and deliver innovative and meaningful treatments to help people reach their life's potential. Today, we have more than 9,000 highly dedicated and talented employees, global marketing and sales capabilities with a presence in more than 100 countries, a rich and ever-evolving portfolio of pharmaceuticals, biologics and medical devices, and state-of-the-art resources in R&D, manufacturing and safety surveillance that help millions of patients see more clearly, move more freely and express themselves more fully. From our beginnings as an eye care company to our focus today on several medical specialties, including ophthalmology, neurosciences, obesity, urologics, medical aesthetics and dermatology, Allergan is proud to celebrate 60 years of medical advances and proud to support the patients and physicians who rely on our products and the employees and communities in which we live and work.

® and ™ Marks owned by Allergan, Inc.
LEVADEX™ is a trademark owned by MAP Pharmaceuticals, Inc.

     
ALLERGAN, INC.

Condensed Consolidated Statements of Earnings and

Reconciliation of Non-GAAP Adjustments

(Unaudited)

 
Three months ended
In millions, except per share amounts December 31, 2010           December 31, 2009
      Non-GAAP             Non-GAAP      
GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP
Revenues
Product net sales $ 1,290.1 $ -- $ 1,290.1 $ 1,206.5 $ -- $ 1,206.5
Other revenues   19.2     --     19.2     17.8     --     17.8  
1,309.3 -- 1,309.3 1,224.3 -- 1,224.3
 
Operating costs and expenses
Cost of sales (excludes amortization of acquired intangible assets) 182.8 -- 182.8 184.6 -- 184.6
Selling, general and administrative 527.5 (11.0 )(a)(b) 516.5 497.6 5.3 (i)(j)(k) 502.9
Research and development 200.3 0.1 (b) 200.4 185.4 (0.2 )(i) 185.2
Amortization of acquired intangible assets 32.5 (26.6 )(c) 5.9 36.2 (30.7 )(c) 5.5
Legal settlement (0.7 ) 0.7 (d) -- -- -- --
Restructuring charges (reversal)   (0.5 )   0.5 (e)   --     3.6     (3.6 )(e)   --  
 
Operating income 367.4 36.3 403.7 316.9 29.2 346.1
 
Non-operating income (expense)
Interest income 3.2 -- 3.2 1.4 -- 1.4
Interest expense (27.8 ) 6.4 (f) (21.4 ) (21.2 ) 6.1 (f) (15.1 )
Other, net   (9.8 )   0.6 (g)   (9.2 )   (1.3 )   (3.6 )(l)   (4.9 )
  (34.4 )   7.0     (27.4 )   (21.1 )   2.5     (18.6 )
 
Earnings before income taxes 333.0 43.3 376.3 295.8 31.7 327.5
 
Provision for income taxes   69.9     33.3 (h)   103.2     73.0     15.1 (m)   88.1  
 
Net earnings 263.1 10.0 273.1 222.8 16.6 239.4
 
                                                                           

Posted: February 2011


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