Allergan Reports Second Quarter 2011 Operating Results

  • Board of Directors Declares Second Quarter Dividend
IRVINE, Calif.--(BUSINESS WIRE)--Aug 3, 2011 - Allergan, Inc. (NYSE:AGN) today announced operating results for the quarter ended June 30, 2011. Allergan also announced that its Board of Directors has declared a second quarter dividend of $0.05 per share, payable on September 8, 2011 to stockholders of record on August 18, 2011.

Operating Results Attributable to Stockholders

For the quarter ended June 30, 2011:

  • Allergan reported $0.79 diluted earnings per share attributable to stockholders compared to $0.78 diluted earnings per share attributable to stockholders for the second quarter of 2010.
  • Allergan reported $0.96 non-GAAP diluted earnings per share attributable to stockholders compared to $0.85 non-GAAP diluted earnings per share attributable to stockholders for the second quarter of 2010, a 12.9 percent increase.
Product Sales

For the quarter ended June 30, 2011:

  • Allergan reported $1,400.4 million total product net sales. Total product net sales increased 13.7 percent compared to total product net sales in the second quarter of 2010. On a constant currency basis, total product net sales increased 9.6 percent compared to total product net sales in the second quarter of 2010.
    • Total specialty pharmaceuticals net sales increased 14.0 percent, or 10.1 percent on a constant currency basis, compared to total specialty pharmaceuticals net sales in the second quarter of 2010.
    • Total medical devices net sales increased 12.2 percent, or 7.0 percent on a constant currency basis, compared to total medical devices net sales in the second quarter of 2010.
“During the second quarter, Allergan continued to deliver strong operating results,” said David E.I. Pyott, Allergan's Chairman of the Board, President and Chief Executive Officer. “Sales growth was again based on a broad range of products and geographies, and continues to benefit from our product approvals in 2010.”

Product and Pipeline Update

During the second quarter of 2011:

  • On May 4, 2011, Allergan and Molecular Partners AG announced that they entered into a license agreement for MP0112, a Phase II proprietary therapeutic DARPin® protein targeting VEGF under investigation for the treatment of retinal diseases. Under the agreement, Allergan obtained exclusive global rights for MP0112 for ophthalmic indications. The parties are working together to transition the program to Allergan during Phase IIb development and Allergan will be responsible for Phase III development and commercialization activities.
  • On May 26, 2011, MAP Pharmaceuticals, Inc. announced that it had submitted a New Drug Application (NDA) to the United States Food and Drug Administration (FDA) for Levadex® orally inhaled migraine drug for the potential acute treatment of migraine in adults. On January 31, 2011, Allergan and MAP Pharmaceuticals, Inc. announced a collaboration within the United States for Levadex®.
  • On June 17, 2011, Allergan announced that the French license committee of the Agence Française de Sécurité Sanitaire des Produits de Santé (AFSSAPS) granted a Positive Opinion for BOTOX® (botulinum toxin type A) as a treatment for urinary incontinence associated with neurogenic detrusor overactivity, not controlled with an anticholinergic treatment, in people with spinal cord injury or multiple sclerosis who are willing and able to use a catheter to empty their bladder. The Positive Opinion marks an important step in the regulatory process towards securing the final Marketing Authorization for this specific indication of BOTOX® in France.
  • On June 24, 2011, Allergan announced that the FDA approved a fully in vitro, cell-based assay for use in the stability and potency testing of BOTOX® (onabotulinumtoxinA) and BOTOX® Cosmetic. The newly approved assay will be implemented immediately for release of product for sale in the United States. Allergan estimates that use of the new assay will reduce the use of animal-based assay testing for BOTOX® and BOTOX® Cosmetic by up to 95 percent or more over the next three years, as other regulatory agencies around the world approve this new assay.
  • On June 28, 2011, the European Medicines Agency (EMA) extended the Marketing Authorization for OZURDEX® (dexamethasone 0.7mg intravitreal implant in applicator) in the 27 member states of the European Union to include the treatment of inflammation of the posterior segment of the eye presenting as non-infectious uveitis.
Following the end of the second quarter of 2011:
  • Effective July 1, 2011, Allergan established direct operations in South Africa, building upon its successful distribution agreement with Genop Healthcare (Genop) in the region for the past 13 years. Under the terms of the transaction, Allergan acquired the Allergan-related parts of Genop's business and assumed responsibility for promotion, marketing and distribution of all its products in South Africa.
  • On July 22, 2011, Allergan closed the merger of Vicept Therapeutics, Inc. (Vicept), a privately-held dermatology company, for an up-front payment of $75 million. Vicept's lead investigational product, V-101, is a topical cream for the treatment of the erythema (redness) associated with rosacea. Allergan is also obligated to make additional payments of up to an aggregate of $200 million contingent upon achieving certain future development and regulatory milestones as well as additional payments contingent upon achieving certain sales milestones.
  • On July 27, 2011, the National Institute for Health and Clinical Excellence (NICE) issued final guidance recommending OZURDEX® (dexamethasone 0.7mg intravitreal implant in applicator) for the treatment of macular edema due to central retinal vein occlusion and also for branch retinal vein occlusion where laser photocoagulation is neither beneficial nor appropriate.
Outlook

For the full year of 2011, Allergan expects:

  • Total product net sales between $5,220 million and $5,370 million.
    • Total specialty pharmaceuticals net sales between $4,310 million and $4,440 million.
    • Total medical devices net sales between $910 million and $930 million.
    • ALPHAGAN® franchise product net sales between $400 million and $420 million.
    • LUMIGAN® franchise product net sales between $610 million and $630 million.
    • RESTASIS® product net sales between $680 million and $710 million.
    • BOTOX® product net sales between $1,550 million and $1,590 million.
    • LATISSE® product net sales at approximately $100 million.
    • Breast aesthetics product net sales between $350 million and $360 million.
    • Obesity intervention product net sales at approximately $200 million.
    • Facial aesthetics product net sales between $360 million and $370 million.
  • Non-GAAP cost of sales to product net sales ratio at approximately 14.5%.
  • Non-GAAP other revenue at approximately $70 million.
  • Non-GAAP selling, general and administrative expenses to product net sales ratio at approximately 40%.
  • 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 $3.59 and $3.63.
  • Diluted shares outstanding at approximately 310 million.
  • Effective tax rate on non-GAAP earnings at approximately 28%.
For the third quarter of 2011, Allergan expects:
  • Total product net sales between $1,265 million and $1,340 million.
  • Non-GAAP diluted earnings per share attributable to stockholders between $0.88 and $0.90.
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 selling, general and administrative expenses, non-GAAP research and development expenses, non-GAAP amortization of acquired intangible assets, non-GAAP intangible asset impairment and related costs, non-GAAP restructuring charges, non-GAAP interest expense, 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, 2010 and Form 10-Q for the quarter ended March 31, 2011. 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 is a multi-specialty health care company established more than 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 approximately 10,000 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, medical devices and over-the-counter consumer products, 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, medical aesthetics, medical dermatology, breast aesthetics, obesity intervention and urologics, 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 June 30, 2011           June 30, 2010
GAAP         Non-GAAP Adjustments         Non-GAAP GAAP         Non-GAAP Adjustments         Non-GAAP
Revenues
Product net sales $ 1,400.4 $ -- $ 1,400.4 $ 1,231.7 $ -- $ 1,231.7
Other revenues   16.8     --     16.8     15.5     --     15.5  
1,417.2 -- 1,417.2 1,247.2 -- 1,247.2
 
Operating costs and expenses
Cost of sales (excludes amortization of acquired intangible assets) 195.3 -- 195.3 191.3 -- 191.3
Selling, general and administrative 566.7 (3.5 ) (a)(b)(c)(d)(e)(f) 563.2 499.0 (4.5 ) (n)(o)(p) 494.5
Research and development 257.4 (45.0 ) (d) 212.4 187.6 -- 187.6
Amortization of acquired intangible assets 31.2 (25.3 ) (g) 5.9 37.3 (31.3 ) (g) 6.0
Intangible asset impairment and related costs 3.3 (3.3 ) (h) -- -- -- --
Restructuring charges   0.1     (0.1 ) (i)   --     0.1     (0.1 ) (i)   --  
 
Operating income 363.2 77.2 440.4 331.9 35.9 367.8
 
Non-operating income (expense)
Interest income 1.5 -- 1.5 1.2 -- 1.2
Interest expense (15.2 ) 0.8   (j) (14.4 ) (13.9 ) 6.3   (j) (7.6 )
Other, net   (5.5 )   (2.5 ) (k)(l)   (8.0 )   14.3   (8.9 ) (q)   5.4  
  (19.2 )   (1.7 )   (20.9 )   1.6     (2.6 )   (1.0 )
 
Earnings before income taxes 344.0 75.5 419.5 333.5 33.3                  

Posted: August 2011


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