Allergan third quarter diluted loss per share increases to $2.21

Allergan, Inc. (NYSE: AGN) today announced operating results for the quarter ended September 30, 2010. Allergan also announced that its Board of Directors has declared a third quarter dividend of $0.05 per share, payable on December 1, 2010 to stockholders of record on November 10, 2010.

“non-GAAP intangible asset impairment and related costs”

Operating Results Attributable to Stockholders

For the quarter ended September 30, 2010:

  • Allergan reported $2.21 diluted loss per share attributable to stockholders compared to $0.58 diluted earnings per share attributable to stockholders for the third quarter of 2009.
  • Allergan reported $0.78 non-GAAP diluted earnings per share attributable to stockholders compared to $0.70 non-GAAP diluted earnings per share attributable to stockholders for the third quarter of 2009, an 11.4 percent increase.

Product Sales

For the quarter ended September 30, 2010:

  • Allergan reported $1,192.0 million total product net sales. Total product net sales increased 5.7 percent compared to total product net sales in the third quarter of 2009. On a constant currency basis, total product net sales increased 6.3 percent compared to total product net sales in the third quarter of 2009.
    • Total specialty pharmaceuticals net sales increased 5.2 percent, or 5.7 percent on a constant currency basis, compared to total specialty pharmaceuticals net sales in the third quarter of 2009.
    • Total medical devices net sales increased 8.3 percent, or 9.0 percent on a constant currency basis, compared to total medical devices net sales in the third quarter of 2009.

"We are very pleased with our third quarter results," said David E.I. Pyott, Allergan's Chairman of the Board and Chief Executive Officer. "Strong R&D performance led to a series of several important product approvals, including FDA approval of LUMIGAN® 0.01%, OZURDEX® for uveitis, and BOTOX® for the prophylactic treatment of headaches in adults with chronic migraine, as well as approvals in Europe and Canada."

Product and Pipeline Update

During the third quarter of 2010:

  • Effective July 1, 2010, Allergan established direct operations in Poland and Turkey.
  • On July 9, 2010, Allergan announced that BOTOX® (botulinum toxin type A) was licensed by the Medicines and Healthcare Products Regulatory Agency in the United Kingdom 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, making OZURDEX® the first licensed treatment in Europe for macular edema in patients with retinal vein occlusion.
  • On August 31, 2010, Allergan announced that the United States Food and Drug Administration (FDA) approved LUMIGAN® (bimatoprost ophthalmic solution) 0.01% as a first-line therapy indicated for the reduction of elevated intraocular pressure in patients with open-angle glaucoma or ocular hypertension.
  • On September 24, 2010, Allergan announced that the FDA approved OZURDEX® (dexamethasone intravitreal implant) 0.7 mg for the treatment of non-infectious ocular inflammation, or uveitis, affecting the posterior segment of the eye.
  • Health Canada approved RESTASIS® (cyclosporine ophthalmic emulsion) 0.05% for the treatment of moderate to moderately severe aqueous deficient dry eye disease.
  • Allergan acquired from Vistakon Pharmaceuticals, LLC, Janssen Pharmaceutica N.V., Beerse and Johnson & Johnson Vision Care Inc. the global license to manufacture and commercialize alacafadine 0.25%, a topical allergy medication for the prevention and treatment of itching associated with allergic conjunctivitis. Alcaftadine is FDA-approved in the United States under the brand name LASTACAFT™ (alcaftadine ophthalmic solution).

Following the end of the third quarter of 2010:

  • On October 15, 2010, Allergan announced that the 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.

Other Events

  • On August 31, 2010, Allergan concluded that the intangible assets and a related prepaid royalty asset associated with the SANCTURA® franchise (the "SANCTURA® Assets"), which Allergan acquired in connection with its October 2007 acquisition of Esprit Pharma Holding Company, Inc. and certain subsequent licensing and commercialization transactions, had become impaired. Allergan determined that an impairment charge was required with respect to the SANCTURA® Assets because the estimated undiscounted future cash flows over their remaining useful life were not sufficient to recover the current carrying amount of the SANCTURA® Assets and the carrying amount exceeded the estimated fair value of those assets due to a reduction in expected future financial performance for the SANCTURA® franchise resulting from lower than anticipated acceptance by patients, physicians and payers. As a result, the Company's third quarter 2010 financial results include an aggregate non-cash pre-tax charge of $369.1 million related to the impairment of the SANCTURA® Assets.
  • On September 1, 2010, Allergan announced that it had reached a resolution with the United States Department of Justice (DOJ) regarding the previously reported Government investigation into Allergan's past U.S. sales and marketing practices relating to certain therapeutic uses of BOTOX®. Allergan cooperated with the Government in a multi-year investigation regarding the use of BOTOX® for certain therapeutic treatments covering a period that commenced in January of 2000. The parties resolved all issues involved in the investigation by entering into a global settlement, pursuant to which:

Outlook

For the full year of 2010, Allergan expects:

  • Total product net sales between $4,750 million and $4,800 million.
    • Total specialty pharmaceuticals net sales between $3,950 million and $3,970 million.
    • Total medical devices net sales between $800 million and $830 million.
    • ALPHAGAN® franchise product net sales between $380 million and $390 million.
    • LUMIGAN® franchise product net sales between $520 million and $530 million.
    • RESTASIS® product net sales between $600 million and $610 million.
    • SANCTURA® franchise product net sales at approximately $60 million.
    • BOTOX® product net sales between $1,390 million and $1,400 million.
    • LATISSE® product net sales at approximately $90 million.
    • Breast aesthetics product net sales between $300 million and $310 million.
    • Obesity intervention product net sales between $230 million and $240 million.
    • Facial aesthetics product net sales between $270 million and $280 million.
  • Non-GAAP cost of sales to product net sales ratio between 15.5% and 16.0%.
  • Non-GAAP other revenue at approximately $50 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 acquired intangible assets associated with the Inamed, Cornéal, EndoArt, Esprit, Samil and Serica acquisitions, the ACZONE® asset purchase and LASTACAFT™ license.
  • Non-GAAP diluted earnings per share attributable to stockholders between $3.14 and $3.16.
  • Diluted shares outstanding at approximately 308 million.
  • Effective tax rate on non-GAAP earnings at approximately 28%.

For the fourth quarter of 2010, Allergan expects:

  • Total product net sales between $1,220 million and $1,270 million.
  • Non-GAAP diluted earnings per share attributable to stockholders between $0.86 and $0.88.
Source:

Allergan, Inc.

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