UPDATE: Allergan 3Q Profit Rises 8.3% With Botox Help
October 29 2009 - 1:09PM
Dow Jones News
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.)