) reported first quarter 2013 earnings of 98 cents per share,
beating the Zacks Consensus Estimate of 96 cents per share by 2
While earnings increased 18.1% from the year-ago quarter,
revenues increased 8.3% to $1,459.6 million, above the Zacks
Consensus Estimate of $1,443 million.
The Quarter in Detail
Specialty pharmaceuticals sales increased 8.1% to $1,231.8
million, with eye-care, pharmaceutical, Botox and skin-care sales
Eye-care pharmaceutical sales increased 2.5% to $668.6 million
with products like Restasis (up 11.3%), Alphagan franchise (up
4.1%) and the Latisse (up 6.9%) contributing to growth.
Allergan continues to expect Lumigan franchise sales to increase
to $630 million - $660 million in 2013. Meanwhile, Alphagan
franchise sales are still expected in the range of $440 - $470
million in 2013.
Restasis sales are expected to increase to $850 million - $890
million in 2013 (previous guidance: $830 million - $870 million).
Allergan continues to expect Latisse sales to increase to $110
million in 2013.
Botox sales increased 14.8% year over year to $457.9 million. In
Jan 2013, the Food and Drug Administration (FDA) approved Botox
for the treatment of patients suffering from overactive bladder
(OAB) with symptoms of urge urinary incontinence, urgency and
frequency. The drug can be used in adults with OAB, who have not
responded adequately to, or, are intolerant to anticholinergic
Allergan increased the lower end of its 2013 Botox sales
guidance by $20 million and now expects 2013 Botox sales in the
range of $1,920 million - $2,000 million (previous guidance:
$1,900 million - $2,000 million).
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Meanwhile, Allergan's medical devices segment posted sales of
$200.7 million, up 10.2%. While breast aesthetics sales decreased
8.9% to $89.6 million, facial aesthetics sales increased 32.6% to
Allergan is looking to sell the obesity intervention segment and
expects to do the same in mid-2013. We note that the obesity
intervention unit is treated as discontinued operations from the
first quarter of 2013.
Selling, general and administrative (SG&A) expenses increased
5.9% during the quarter to $586.9 million. Research and
development (R&D) expenses amounted to $248.8 million, up
2013 Earnings Guidance
Allergan now expects 2013 earnings of $4.70 - $4.76 per share as
compared to previous guidance of $4.75 - $4.83 per share. The
guidance excludes the impact of the R&D tax credit signed
into law earlier this year. The Zacks Consensus Estimate
currently standing at $4.76 per share.
The company expects product net sales to range from $5,975
- $6,200 million in 2013 (previous guidance: $5,900 million -
For 2013, Allergan expects total specialty pharmaceuticals net
sales of $5,175 million - $5,340 million (previous guidance:
$5,100 million - $5,340 million).
The company continues to expect medical devices net sales of $800
million - $860 million. Here, performance will be driven mainly
by facial aesthetics. Facial aesthetics sales are still expected
in the range of $410 million - $440 million.
Breast aesthetics sales are continued to be expected in the range
of $390 million - $420 million.
For 2013, Allergan reiterated its cost guidance and expects cost
of sales to product net sales ratio of about 13.5%, SG&A
expenses to product net sales ratio of 37% - 38% and R&D
expenses to product net sales ratio of 16.5%.
Allergan expects second quarter earnings in the range of $1.18 -
$1.20 per share on product net sales of $1,500 million and $1,575
million. We note that Allergan's guidance includes the dilutive
impact of MAP Pharmaceuticals acquisition. The Zacks Consensus
Estimate currently stands at $1.23 per share, above the company's
Allergan currently carries a Zacks Rank #3 (Hold). While we
believe Allergan's presence across different segments will help
maintain growth going forward. Stocks that look better at present
) which carries a Zacks Rank #2 (Buy).
Onyx Pharmaceuticals, Inc.
) also look well-positioned with a Zacks Rank #1 (Strong