Allergan second-quarter diluted EPS increases to $0.78

Allergan, Inc. (NYSE:AGN) today announced operating results for the quarter ended June 30, 2010. Allergan also announced that its Board of Directors has declared a second quarter dividend of $0.05 per share, payable on September 7, 2010 to stockholders of record on August 17, 2010.

“non-GAAP basic and diluted earnings per share attributable to Allergan, Inc. stockholders”

Operating Results Attributable to Stockholders

For the quarter ended June 30, 2010:

  • Allergan reported $0.78 diluted earnings per share attributable to stockholders compared to $0.58 diluted earnings per share attributable to stockholders for the second quarter of 2009.
  • Allergan reported $0.85 non-GAAP diluted earnings per share attributable to stockholders compared to $0.75 non-GAAP diluted earnings per share attributable to stockholders for the second quarter of 2009, a 13.3 percent increase.

Product Sales

For the quarter ended June 30, 2010:

  • Allergan reported $1,231.7 million total product net sales. Total product net sales increased 10.1 percent compared to total product net sales in the second quarter of 2009. On a constant currency basis, total product net sales increased 9.3 percent compared to total product net sales in the second quarter of 2009.
    • Total specialty pharmaceuticals net sales increased 10.0 percent, or 9.2 percent on a constant currency basis, compared to total specialty pharmaceuticals net sales in the second quarter of 2009.
    • Total medical devices net sales increased 10.6 percent, or 10.0 percent on a constant currency basis, compared to total medical devices net sales in the second quarter of 2009.

"During the second quarter, Allergan continued to deliver strong operating results in both our pharmaceutical and medical device businesses as we benefited from a continuing recovery in our cash-pay aesthetics businesses around the world," said David E.I. Pyott, Allergan's Chairman of the Board and Chief Executive Officer. "In addition, we continued to expand our geographic presence in the rapidly growing emerging markets through the initiation of direct operations, beginning in early July, in both Turkey and Poland."

Product and Pipeline Update

During the second 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.
  • On May 19, 2010, Allergan announced that the United States Food and Drug Administration (FDA) approved ZYMAXID™ (gatifloxacin ophthalmic solution) 0.5%, a topical fluoroquinolone anti-infective indicated for the treatment of bacterial conjunctivitis caused by susceptible strains of the following organisms; Haemophilus influenzae, Staphylococcus aureus, Staphylococcus epidermidis, Streptococcus mitis group, Streptococcus oralis, Streptococcus pneumonia.
  • The FDA requested that Allergan submit to FDA a modified Risk Evaluation and Mitigation Strategy (REMS) for BOTOX® (onabotulinumtoxinA) to include reference to the chronic migraine indication for which Allergan is seeking approval. In particular, FDA requested that Allergan 1. update the BOTOX® Medication Guide to include the chronic migraine indication, 2. update the REMS to include a physician training plan for chronic migraine, and 3. propose a physician communication plan regarding the chronic migraine indication, including a draft "dear healthcare practitioner" letter announcing the chronic migraine indication and providing information on the updated REMS. Allergan has provided all of the requested information to the FDA and FDA has informed Allergan that it has extended the user fee goal date by three months. Although the FDA communication states that the extension was made to review the additional REMS materials, investors are cautioned that FDA's review is not complete and no assessment of approval has been communicated to Allergan.

Following the end of the second quarter of 2010:

  • Effective July 1, 2010, Allergan transferred back sales and marketing rights for Allergan products from its distributor in Poland and established direct operations in Poland.
  • Allergan entered into a new agreement with its distributor in Turkey which allowed Allergan to establish direct operations in Turkey effective July 1, 2010.
  • On July 9, 2010, Allergan announced that BOTOX® (botulinum toxin type A) was licensed by the Medicines and Healthcare Products Regulatory Agency (MHRA) in the UK for the prophylaxis of headaches in adults who have chronic migraine (headaches on at least 15 days per month of which at least 8 days are with migraine).
  • On July 27, 2010, the European Medicines Agency granted marketing authorization for OZURDEX® (dexamethasone 700mcg intravitreal implant in applicator) in the 27 member states of the European Union. This makes OZURDEX® the first licensed treatment in Europe for macular edema in patients with retinal vein occlusion. Allergan anticipates launching OZURDEX® across the region, starting in the third quarter of 2010.

Outlook

For the full year of 2010, Allergan expects:

  • Total product net sales between $4,620 million and $4,750 million.
    • Total specialty pharmaceuticals net sales between $3,835 million and $3,930 million.
    • Total medical devices net sales between $785 million and $820 million.
    • ALPHAGAN® franchise product net sales between $370 million and $390 million.
    • LUMIGAN® franchise product net sales between $490 million and $510 million.
    • RESTASIS® product net sales between $580 million and $600 million.
    • SANCTURA® franchise product net sales between $70 million and $80 million.
    • BOTOX® product net sales between $1,360 million and $1,390 million.
    • LATISSE® product net sales between $90 million and $100 million.
    • Breast aesthetics product net sales between $290 million and $300 million.
    • Obesity intervention product net sales between $235 million and $250 million.
    • Facial aesthetics product net sales between $260 million and $270 million.
  • Non-GAAP cost of sales to product net sales ratio between 15.5% and 16.0%.
  • Other revenue at approximately $50 million.
  • Non-GAAP selling, general and administrative expenses to product net sales ratio between 39% and 40%.
  • Non-GAAP research and development expenses to product net sales ratio between 15% and 16%.
  • Non-GAAP amortization of acquired intangible assets at approximately $20 million. This expectation excludes the amortization of acquired intangible assets associated with the Inamed, Cornéal, EndoArt, Esprit, Samil and Serica acquisitions and the ACZONE® asset purchase.
  • Non-GAAP diluted earnings per share attributable to stockholders between $3.11 and $3.15.
  • Diluted shares outstanding between approximately 307 million and 308 million.
  • Effective tax rate on non-GAAP earnings at approximately 28%.

For the third quarter of 2010, Allergan expects:

  • Total product net sales between $1,130 million and $1,180 million.
  • Non-GAAP diluted earnings per share attributable to stockholders between $0.75 and $0.77.
Source:

Allergan, Inc.

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