Allergan Reports Fourth Quarter 2009 Operating Results
(IRVINE, Calif., February 4, 2010) - Allergan, Inc. (NYSE: AGN) today announced operating results for the quarter ended December 31, 2009. Allergan also announced that its Board of Directors has declared a fourth quarter dividend of $0.05 per share, payable on March 12, 2010 to stockholders of record on February 19, 2010.
Operating Results Attributable to Stockholders
For the quarter ended December 31, 2009:
- Allergan reported $0.72 diluted earnings per share attributable to stockholders compared to $0.48 diluted earnings per share attributable to stockholders reported for the fourth quarter of 2008.
- Allergan's non-GAAP diluted earnings per share attributable to stockholders were $0.78 in the fourth quarter of 2009, compared to non-GAAP diluted earnings per share attributable to stockholders of $0.76 in the fourth quarter of 2008, a 2.6 percent increase.
For the quarter ended December 31, 2009:
- Allergan's total product net sales were $1,206.5 million. Total product net sales increased 15.9 percent compared to total product net sales in the fourth quarter of 2008. On a constant currency basis, total product net sales increased 11.2 percent compared to total product net sales in the fourth quarter of 2008.
- Total specialty pharmaceuticals net sales increased 17.7 percent, or 13.1 percent on a constant currency basis, compared to total specialty pharmaceuticals net sales in the fourth quarter of 2008.
- Total medical devices net sales increased 8.3 percent, or 3.1 percent on a constant currency basis, compared to total medical devices net sales in the fourth quarter of 2008.
"The fourth quarter proved to be another strong quarter for Allergan as we benefited from the commercial investments made since mid-year and observed some recovery in our markets," said David E.I. Pyott, Allergan's Chairman of the Board and Chief Executive Officer. "In 2010 we look forward to rebuilding our cash-pay markets and to introducing some significant therapeutic innovations."
Based on internal information and assumptions, full year 2009 therapeutic sales accounted for approximately
52% of total BOTOX® (onabotulinumtoxinA) sales and increased approximately 4% compared to
2008. Full year 2009 cosmetic sales accounted for approximately 48% of total BOTOX® sales and decreased approximately 4% compared to 2008.
Product and Pipeline Update
During the fourth quarter of 2009:
- On October 1, 2009, Allergan filed a declaratory relief action in the United States District Court for the District of Columbia to seek a ruling that would allow the company to proactively share truthful and relevant information with the medical community regarding the safe use of BOTOX® for certain therapeutic off-label treatments.
- On October 23, 2009, Allergan announced that the United States District Court for the District of Delaware ruled in favor of Allergan, Inc. in its patent infringement suit against Exela PharmSci, Inc., Exela PharmSci Pvt., Ltd., Apotex, Inc. and Apotex Corp. (collectively, the "Defendants") finding that the patents are valid and enforceable against the Defendants and that the Defendants' proposed generic versions of Allergan's ALPHAGAN® P (brimonidine tartrate ophthalmic solution) 0.1% and 0.15% products infringe Allergan's patents. Pursuant to the Hatch-Waxman Act, the U.S. Food and Drug Administration (FDA) is required to delay approval of the Defendants' proposed generic products until after Allergan's last applicable patent expires in 2022.
- Allergan filed a supplemental New Drug Application with the FDA for the approval of OZURDEX™ (dexamethasone intravitreal implant) 0.7 mg to treat non-infectious intermediate and posterior uveitis.
Following the end of the fourth quarter of 2009:
- On January 7, 2010, Allergan received marketing authorization from The European Commission for LUMIGAN® (bimatoprost ophthalmic solution) 0.01% which applies to the 27 countries of the European Union.
- On February 1, 2010, Allergan announced FDA approval of JUVÉDERM® XC dermal filler formulated with lidocaine to provide patients with enhanced comfort during treatment of moderate to severe facial wrinkles and folds, such as the nasolabial folds (or "parentheses") that appear around the nose and mouth.
- Allergan completed its acquisition of Serica Technologies, Inc., a medical device company focused on the development of biodegradable silk-based scaffolds for use in tissue regeneration, including breast augmentation, revision and reconstruction and bariatric applications.
For the full year of 2010, Allergan expects:
- Total product net sales between $4,550 million and $4,750 million.
- Total specialty pharmaceuticals net sales between $3,780 million and $3,930 million.
- Total medical devices net sales between $770 million and $820 million.
- ALPHAGAN® franchise product net sales between $320 million and $340 million.
- LUMIGAN® franchise product net sales between $520 million and $540 million.
- RESTASIS® product net sales between $580 million and $600 million.
- SANCTURA® franchise product net sales between $90 million and $100 million.
- BOTOX® product net sales between $1,330 million and $1,370 million.
- LATISSE® product net sales at approximately $140 million.
- Breast aesthetics product net sales between $290 million and $300 million.
- Obesity intervention product net sales between $250 million and $270 million.
- Facial aesthetics product net sales between $230 million and $250 million.
- Non-GAAP cost of sales to product net sales ratio between 16.0% and 16.5%.
- Other revenue at approximately $60 million.
- Non-GAAP selling, general and administrative expenses to product net sales ratio between 39% and 40%.
- Non-GAAP research and development expenses to product net sales ratio between 15% and 16%.
- Non-GAAP amortization of acquired intangible assets at approximately $20 million. This expectation excludes the amortization of acquired intangible assets associated with the Inamed, Cornéal, EndoArt, Esprit, Samil and Serica acquisitions and the ACZONE® asset purchase.
- Non-GAAP diluted earnings per share attributable to stockholders between $3.09 and $3.15.
- Diluted shares outstanding between approximately 307 million and 308 million.
- Effective tax rate on non-GAAP earnings between 28% and 29%.
For the first quarter of 2010, Allergan expects:
- Total product net sales between $1,060 million and $1,100 million.
- Non-GAAP diluted earnings per share attributable to stockholders between $0.57 and $0.59.
Expectations assume no passage of significant U.S. healthcare reform legislation including excise taxes or new rebates.
On January 1, 2009, Allergan adopted the update to Financial Accounting Standards Board (FASB) guidance related to the accounting for convertible debt instruments that may be settled fully or partially in cash upon conversion, which requires retrospective application to prior periods. The impact from the adoption of this guidance on the previously reported GAAP results for the fourth quarter and full year of 2008 was a reduction of diluted earnings per share attributable to stockholders of $0.02 and $0.05, respectively, from the amounts previously reported. Non-GAAP diluted earnings per share attributable to stockholders for the fourth quarter and full year of 2008 were not impacted.
All prior period information in the financial tables of this press release has been retrospectively adjusted to reflect the impact of the adoptions in the first quarter of 2009 of updates to FASB guidance related to the accounting for convertible debt instruments that may be settled fully or partially in cash upon conversion and the accounting and financial reporting of noncontrolling ownership interests in subsidiaries held by parties other than the parent.
Historical non-GAAP basic and diluted earnings per share attributable to stockholders, non-GAAP cost of sales, non-GAAP selling, general and administrative expenses, non-GAAP research and development expenses, non-GAAP amortization of acquired intangible assets, non-GAAP interest expense, effective tax rate on non-GAAP earnings as well as historic non-GAAP net sales reported in constant currency and expectations for non-GAAP diluted earnings per share attributable to stockholders are each reconciled to the most directly comparable GAAP financial measure in the financial tables of this press release and the accompanying footnotes. The reconciliation for the expectation amounts in the financial tables includes an estimate of the future effect from amortization of acquired intangible assets and non-cash interest expense associated with amortization of convertible debt discount.
In this press release, the statements regarding product development, market potential, expected growth, anticipated product filings, approvals and labeling, the statements by Mr. Pyott as well as Allergan's earnings per share, product net sales, revenue forecasts and any other statements that refer to Allergan's expected, estimated or anticipated future results, are forward-looking statements. Because forecasts are inherently estimates that cannot be made with precision, Allergan's performance at times differs materially from its estimates and targets, and Allergan often does not know what the actual results will be until after the end of the applicable reporting period. Therefore, Allergan will not report or comment on its progress during a current quarter except through public announcement. Any statement made by others with respect to progress during a current quarter cannot be attributed to Allergan.
All forward-looking statements in this press release reflect Allergan's current analysis of existing trends and information and represent Allergan's judgment only as of the date of this press release. Actual results may differ materially from current expectations based on a number of factors affecting Allergan's businesses, including, among other things the following: changing competitive, market and regulatory conditions; the timing and uncertainty of the results of both the R&D and regulatory processes; domestic and foreign health care and cost containment reforms, including government pricing, tax and reimbursement policies; technological advances and patents obtained by competitors; the performance, including the approval, introduction, and consumer and physician acceptance of new products and the continuing acceptance of currently marketed products; the effectiveness of advertising and other promotional campaigns; the timely and successful implementation of strategic initiatives; the results of any pending or future litigation, investigations or claims; the uncertainty associated with the identification of and successful consummation and execution of external corporate development initiatives and strategic partnering transactions; and Allergan's ability to obtain and successfully maintain a sufficient supply of products to meet market demand in a timely manner. In addition, U.S. and international economic conditions, including higher unemployment, financial hardship, consumer confidence and debt levels, taxation, changes in interest and currency exchange rates, international relations, capital and credit availability, the status of financial markets and institutions, as well as the general impact of the current economic crisis, can materially affect Allergan's results. Therefore, the reader is cautioned not to rely on these forward-looking statements. Allergan expressly disclaims any intent or obligation to update these forward-looking statements except as required to do so by law.
Additional information concerning the above-referenced risk factors and other risk factors can be found in press releases issued by Allergan, as well as Allergan's public periodic filings with the Securities and Exchange Commission, including the discussion under the heading "Risk Factors" in Allergan's 2008 Form 10-K and Allergan's Forms 10-Q for the quarters ended March 31, 2009, June 30, 2009, and September 30, 2009. Copies of Allergan's press releases and additional information about Allergan is available at www.allergan.com or you can contact the Allergan Investor Relations Department by calling 714-246-4636.
About Allergan, Inc.
Founded in 1950, Allergan, Inc., with headquarters in Irvine, California, is a multi-specialty health care company that discovers, develops and commercializes innovative pharmaceuticals, biologics and medical devices that enable people to live life to its greatest potential - to see more clearly, move more freely, express themselves more fully. The Company employs more than 8,000 people worldwide and operates state-of-the-art R&D facilities and world-class manufacturing plants. In addition to its discovery-to-development research organization, Allergan has global marketing and sales capabilities with a presence in more than 100 countries.
Jim Hindman (714) 246-4636 (investors)
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