) reported second quarter 2013 earnings of $1.22 per share, a
couple of cents above the Zacks Consensus Estimate of $1.20 per
While earnings increased 16.2% from the year-ago quarter,
revenues increased 10.2% to $1,597.7 million, above the Zacks
Consensus Estimate of $1,569 million.
The Quarter in Detail
Specialty pharmaceuticals sales increased 11.1% to $1,347.7
million, with eye-care pharmaceuticals, Botox and skin-care sales
Eye-care pharmaceutical sales increased 7.8% to $722.4 million
with products like Restasis (up 10.4%), Alphagan franchise (up
7.9%) and Latisse (up 6.1%) contributing to growth.
Allergan lowered its 2013 guidance for Lumigan franchise sales
to $620 million - $640 million from the earlier guidance of $630
million - $660 million. Meanwhile, Alphagan franchise sales are
now expected in the range of $450 million - $480 million in 2013,
up from the earlier guidance of $440 million - $470 million.
Restasis sales are expected to increase to $870 million - $900
million in 2013 (previous guidance: $850 million - $890 million).
Allergan continues to expect Latisse sales to increase to $110
million in 2013.
Botox sales increased 11.2% year over year to $513 million.
Allergan increased the lower end of its 2013 Botox sales guidance
by $20 million and now expects 2013 Botox sales in the range of
$1,940 million - $2,000 million (previous guidance: $1,920
million - $2,000 million).
Meanwhile, Allergan's medical devices segment posted sales of
$229.3 million, up 7.4%. While breast aesthetics sales increased
5.5% to $106.8 million, facial aesthetics sales increased 9.1% to
Allergan is looking to sell the obesity intervention segment
and is treating this segment as discontinued operations from the
first quarter of 2013.
Selling, general and administrative (SG&A) expenses
increased 9.9% during the quarter to $605.7 million. Research and
development (R&D) expenses amounted to $265.8 million, up
2013 Guidance Tweaked
Allergan now expects 2013 earnings of $4.72 - $4.76 per share
as compared to the previous guidance of $4.70 - $4.76 per share.
The guidance excludes the impact of the R&D tax credit signed
into law earlier this year. The Zacks Consensus Estimate is
currently $4.75 per share.
The company expects product net sales to range from $6,050 -
$6,200 million in 2013 (previous guidance: $5,975 - $6,200
For 2013, Allergan expects total specialty pharmaceuticals net
sales of $5,230 million - $5,340 million (previous guidance:
$5,175 million - $5,340 million).
The company expects medical devices net sales of $820 million
- $860 million (old guidance: $800 million - $860 million). Here,
performance will be driven mainly by facial aesthetics. Facial
aesthetics sales are now expected in the range of $440 million -
$460 million (old guidance: $410 million - $440 million).
Allergan is currently seeking FDA approval for Juvéderm Voluma
XC for cheek augmentation to correct age-related volume deficit
in the mid-face. The company expects to launch the product in
late 2013 provided it gains approval.
Breast aesthetics sales are now expected in the range of $380
million - $400 million (old guidance: $390 million - $420
For 2013, Allergan expects cost of sales to product net sales
ratio of about 13% (old guidance: 13.5%), SG&A expenses to
product net sales ratio of 38% (old guidance: 37% - 38%) and
R&D expenses to product net sales ratio of 16.5%.
Allergan expects third quarter earnings in the range of $1.18
- $1.20 per share on product net sales of $1,500 million and
$1,575 million. Allergan's guidance includes the dilutive impact
of MAP Pharmaceuticals acquisition. The Zacks Consensus Estimate
is currently $1.22 per share.
Meanwhile, Allergan conducted a meeting with the FDA regarding
the complete response letter for Levadex (acute treatment of
migraine in adults). The company intends to re-submit the
marketing application by year end and expects approval in the
second quarter of 2014.
Allergan's second quarter results were once again above
expectations with the company beating the Zacks Consensus
Estimate as well as its guidance. Although we believe Allergan's
presence across different segments will help maintain growth, we
remain concerned about the generic and competitive challenges
being faced by the company. Moreover, Allergan suffered a setback
in Jun 2013 with the issuance of bioequivalence draft guidelines
by the FDA for Restasis. These draft guidelines, if finalized,
could make it easier for generic versions of Restasis to enter
the market. We expect investor focus to remain on the Restasis
Allergan currently carries a Zacks Rank #3 (Hold). At present,
Johnson & Johnson
) look well-positioned. While Actelion is a Zacks Rank #1 (Strong
Buy) stock, Johnson & Johnson and Auxilium are Zacks Rank #2
ALLERGAN INC (AGN): Free Stock Analysis
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