UPDATE: Allergan 3Q Profit Rises 8.3% With Botox Help
(Updates throughout with details on results, recent Botox filings, CEO and
analyst comments, updated share price.)
By Jon Kamp
Of DOW JONES NEWSWIRES
Allergan Inc.'s (AGN) third-quarter profit rose 8.3% with help from rising
Botox sales and while the company boosted spending on advertising as it readied
for an improved economy.
The company also announced Thursday that it made U.S. regulatory filings for
two new medical uses of Botox.
Makers of aesthetic medical treatments--Allergan's roster includes wrinkle
treatments, breast implants and an eyelash-enhancing drug--have been pressured
by the economic downturn. But Allergan said its businesses are performing better
than it expected when the year began.
The Irvine, Calif., company boosted its full-year outlook while forecasting
stronger-than-expected fourth-quarter results.
"With this strength in our businesses, we made the strategic decision to
invest in increased Direct to Consumer advertising programs in the U.S. as we
anticipate recovery from the recession," David E.I. Pyott, Allergan's chairman
and chief executive, said in a release.
Highlighting that investment, selling, general and administrative expenses in
the third quarter were up 13% from a year ago, or 8% excluding items.
Pyott said on a conference call that advertising spending represented nearly
the entire increase, and that "this demonstrates that we continue to strictly
control spending across all other areas."
Allergan shares recently traded up 1.8% to $54.53, and are up about 35% on the
year.
Pyott announced that Allergan made FDA filings aimed at winning approval to
use Botox to treat chronic migraine headaches and upper-limb spasticity. The FDA
said in May it wanted to see more information on spasticity, and Allergan had
planned to file those details plus the migraine application around the end of
the third quarter.
Allergan's third-quarter earnings rose to $179 million, or 58 cents a share,
from $165.4 million, or 54 cents, a year earlier. Excluding restructuring and
other impacts, profit rose to 70 cents a share from 65 cents.
Analysts surveyed by Thomson Reuters had forecast, on average, earnings of 69
cents in the recent quarter, and Allergan in July projected a range of 67 cents
to 69 cents, excluding items.
Product net sales increased 4.2% to $1.13 billion, but grew 7% excluding the
impact of foreign currency rates. Analysts had projected sales of $1.08 billion.
Among Allergan's products, Botox sales rose 3%, or 5.8% excluding currency, to
$327.8 million. Wells Fargo analyst Larry Biegelsen said that tops Wall Street
expectations that Botox sales would decline to $291 million. Allergan's
increased guidance includes a new forecast for Botox sales this year of $1.28
billion to $1.29 billion.
Botox "has performed much stronger than we had anticipated," Pyott said on the
call.
Though perhaps best known for treating facial creases, Botox is also used for
several medical conditions. Along with frown lines, the injectable neurotoxin is
approved in the U.S. to treat uncontrollable blinking, crossed eyes,
uncontrollable contractions of neck and shoulder muscles and excessive underarm
sweating.
Pharmaceutical sales, which include sales of eye-care drugs, rose 7.8% in the
recent quarter while medical-device revenue fell 10.6%. The currency impact
weighed on both categories.
For the full year, Allergan now sees 2009 earnings, excluding items of $2.75 a
share to $2.77 a share and overall product net sales of $4.35 billion to $4.4
billion. The company in July narrowed projections to earnings of $2.71 to $2.75
and product sales of $4.2 billion to $4.3 billion.
Allergan also forecast fourth-quarter income of 75 cents to 77 cents a share
on product sales of $1.11 billion to $1.16 billion. Analysts were projecting a
75-cent profit and total revenue of $1.1 billion.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com
(Mike Barris contributed to this article.)
(END) Dow Jones Newswires
10-29-091254ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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