--Botox sales of about $475 million, the most ever, help boost
earnings 16%
--Expenses to rise in 2013 on increased R&D spending, U.S.
health-care costs
--Allergan continues expansion beyond beauty and cosmetic drug
roots
(Adds details and company comments throughout.)
By Joseph Walker
Allergan Inc.'s (AGN) fourth-quarter earnings rose 16% as the
company grew the use of its face-wrinkle medication Botox for
medical conditions like chronic migraines and overactive
bladders.
Overall, Botox sales surged 14% to $474.6 million in the fourth
quarter, outpacing total revenue growth of 7.6% in the period to
$1.51 billion, Allergan said.
Medical use accounted for more than half of Botox sales last
year and could grow to about 60% in five years, Chief Executive
David Pyott said in an interview, signaling Allergan's continued
expansion beyond its roots in beauty and cosmetic drugs.
The company recently said it would acquire Map Pharmaceuticals
Inc. (MAPP), the maker of an experimental migraine treatment that
Allergan will couple with Botox as a soup-to-nuts chronic headache
offering. By adding Map's Levadex drug, which is awaiting
regulatory approval, Allergan intends to establish Botox as "a
mega-brand, not just the world-famous eraser of wrinkles," Mr.
Pyott said.
Allergan shares recently rose 1.2% to $106.30. The stock is up
16% so far this year as the company gained approvals for Botox in
new medical settings and geographical markets.
The company also is in the process of jettisoning its lap-band
obesity business, which has been a drag on sales growth, and is
discussing selling the brand with potential purchasers. The
lap-band business declined 10% in the fourth quarter, and Mr. Pyott
said Allergan is in the later stages of negotiations with several
private-equity firms.
Allergan expects its total costs to increase in 2013 as the
company looks to advance other medical products to market,
including a treatment for vision loss. As a result, research and
development expenses are seen rising 8%.
"We expect to invest over $1 billion on R&D in 2013, marking
a notable increase from 2012," Mr. Pyott said. Allergan said it
would discontinue development of experimental drug programs that it
decided would not be meaningful contributors to its growth
strategy.
In addition, continued pricing pressures in Europe, combined
with increased expenses from the U.S. health-care overhaul and
medical-device excise tax, will result in $35 million in extra
costs in 2013, Mr. Pyott said.
For the year, the company projected per-share earnings of $4.75
to $4.83, slightly above analysts' estimates. However, for the
current quarter, Allergan forecast per-share earnings of 94 cents
to 96 cents, below expectations of $1.03.
In the fourth quarter, profits rose to $324.2 million, or $1.06
a share, from $279.8 million, or 90 cents a share, a year earlier.
Excluding acquisition-related charges and other items, adjusted
per-share earnings rose to $1.15 from $1, but fell short of the
company's October forecast of $1.18 to $1.20.
European sales grew in the double-digits, Mr. Pyott said,
despite what he called a "challenging" market hampered "by
government-mandated price cuts" as countries there grapple with
sovereign debt.
--Tess Stynes contributed to this article.
Write to Joseph Walker at joseph.walker@dowjones.com
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