Allergan Reports Third Quarter 2012 Operating Results
Allergan Reports Third Quarter 2012 Operating Results
IRVINE, Calif.--(BUSINESS WIRE)-- Allergan, Inc. (NYS: AGN) today announced operating results for the quarter ended September 30, 2012. Allergan also announced that its Board of Directors has declared a third quarter dividend of $0.05 per share, payable on December 12, 2012 to stockholders of record on November 21, 2012.
Operating Results Attributable to Stockholders
For the quarter ended September 30, 2012:
- Allergan reported $0.82 diluted earnings per share attributable to stockholders compared to $0.81 diluted earnings per share attributable to stockholders for the third quarter of 2011.
- Allergan reported $1.06 non-GAAP diluted earnings per share attributable to stockholders compared to $0.92 non-GAAP diluted earnings per share attributable to stockholders for the third quarter of 2011, a 15.2 percent increase.
For the quarter ended September 30, 2012:
- Allergan reported $1,391.1 million total product net sales. Total product net sales increased 6.1 percent compared to total product net sales in the third quarter of 2011. On a constant currency basis, total product net sales increased 9.4 percent compared to total product net sales in the third quarter of 2011.
- Total specialty pharmaceuticals net sales increased 8.1 percent, or 11.4 percent on a constant currency basis, compared to total specialty pharmaceuticals net sales in the third quarter of 2011.
- Total medical devices net sales decreased 4.0 percent, or 0.3 percent on a constant currency basis, compared to total medical devices net sales in the third quarter of 2011.
"In the third quarter, Allergan again delivered solid earnings growth in spite of the strong U.S. Dollar relative to virtually all major currencies," said David E.I. Pyott, Allergan's Chairman of the Board, President and Chief Executive Officer. "In addition, we were pleased to mark the opening of our new R&D facility in New Jersey, as well as to announce the expansion of our relationship with Molecular Partners."
Product and Pipeline Update
During the third quarter of 2012:
- On August 21, 2012, Allergan and Molecular Partners AG announced that they have significantly expanded their existing relationship by entering into two separate agreements to discover, develop, and commercialize proprietary therapeutic DARPin® products for the treatment of serious ophthalmic diseases. The first agreement is an exclusive license agreement for the design, development and commercialization of a potent dual anti-VEGF-A/PDGF-B DARPin® ("MP0260") and its corresponding backups for the treatment of exudative (wet) age-related macular degeneration (AMD) and related conditions. The second agreement is an exclusive discovery alliance agreement under which the parties are collaborating to design and develop DARPin® products against selected targets that are implicated in causing serious diseases of the eye.
- On September 4, 2012, Allergan marked the opening of the company's first large facility in the state of New Jersey. The new Research & Development Center, which will be specifically focused on clinical development, is a significant expansion of the company's footprint in New Jersey and is expected to eventually house several hundred employees.
- On September 28, 2012, Allergan received approval from the Japanese Ministry of Health, Labor and Welfare (MHLW) for the NATRELLE® line of round silicone gel-filled breast implants and Style 133 tissue expanders. Allergan is the first company to receive approval from MHLW in Japan for breast implants for women undergoing breast augmentation, revision or reconstructive surgery.
Following the end of the third quarter of 2012:
- Allergan is exploring strategic options for maximizing the value of its obesity intervention business, including among other things, a potential sale of that business unit. To the extent Allergan elects to pursue such a strategic option, the company intends to offset any potential earnings dilution related to the transaction.
- On October 1, 2012, U.S. District Judge Andrew J. Guilford entered an order providing that the injunction against Merz Aesthetics prohibiting it from, among other things, selling or soliciting purchases of its product Xeomin® in the facial aesthetics market, shall remain in place until January 9, 2013. The order also provides that the terms of the injunction that restrict Merz Aesthetics' ability to sell and solicit purchases of its dermal fillers, as well as the terms that restrict Merz Pharmaceuticals' ability to sell and solicit purchases of Xeomin® in the therapeutic market, shall remain in place until November 1, 2012.
- On October 12, 2012, the U.S. District Court in Santa Ana, California denied a motion by Athena Cosmetics, Inc. for reconsideration of the court's decision to grant Allergan's motion for summary judgment against Athena Cosmetics, Inc. on our unfair competition cause of action. In July 2012, the court granted Allergan's summary judgment motion, finding that Athena's Revitalash® line of products are drugs sold without approval and are therefore misbranded in violation of California law as well as the federal statutes which California law incorporates.
For the full year of 2012, Allergan expects:
- Total product net sales between $5,695 million and $5,770 million.
- Total specialty pharmaceuticals net sales between $4,775 million and $4,830 million.
- Total medical devices net sales between $920 million and $940 million.
- ALPHAGAN®franchise product net sales between $440 million and $450 million.
- LUMIGAN®franchise product netsales between $600 million and $620 million.
- RESTASIS® product netsales between $780 million and $800 million.
- BOTOX® product netsales between $1,760 million and $1,800 million.
- LATISSE® product netsales at approximately $100 million.
- Breast aestheticsproduct netsales between $380 million and $390 million.
- Obesity intervention product netsales at approximately $160 million.
- Facial aesthetics product netsales between $380 million and $390 million.
- Non-GAAP cost of sales to product net sales ratio at approximately 14%.
- Non-GAAP other revenue at approximately $90 million.
- Non-GAAP selling, general and administrative expenses to product net sales ratio at approximately 39%.
- Non-GAAP research and development expenses to product net sales ratio at approximately 16%.
- Non-GAAP amortization of acquired intangible assets at approximately $25 million. This expectation excludes the amortization of certain acquired intangible assets associated with business combinations, asset purchases and product licenses.
- Non-GAAP diluted earnings per share attributable to stockholders between $4.17 and $4.19.
- Diluted shares outstanding at approximately 308 million.
- Effective tax rate on non-GAAP earnings between 27% and 28%.
For the fourth quarter of 2012, Allergan expects:
- Total product net sales between $1,470 million and $1,545 million.
- Non-GAAP diluted earnings per share attributable to stockholders between $1.18 and $1.20.
In this press release, Allergan reports certain historical and expected non-GAAP results, including earnings attributable to Allergan, Inc., non-GAAP basic and diluted earnings per share attributable to stockholders as well as non-GAAP other revenue, 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 impairment of intangible assets and related costs, non-GAAP restructuring charges, non-GAAP interest expense, non-GAAP other, net, non-GAAP earnings before income taxes, non-GAAP provision for income taxes, non-GAAP net earnings and non-GAAP net sales reported in constant currency. Non-GAAP financial measures are reconciled to the most directly comparable GAAP financial measure in the financial tables of this press release and the accompanying footnotes. The information that accompanies the financial tables of this press release also includes an explanation of why Allergan uses these non-GAAP financial measures, certain limitations associated with the use of these non-GAAP financial measures, the manner in which Allergan management compensates for those limitations, and the reasons why Allergan management believes that these non-GAAP financial measures provide useful information to investors.
This press release contains forward-looking statements, including but not limited to the statements by Mr. Pyott and other statements regarding product development, external corporate development initiatives and strategic partnering transactions, market potential, expected growth and regulatory approvals 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. 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 research and development 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, fluctuations or devaluations in the value of sovereign government debt, as well as the general impact of continued economic volatility, 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 U.S. Securities and Exchange Commission, including the discussion under the heading "Risk Factors" in Allergan's 2011 Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Copies of Allergan's press releases and additional information about Allergan are available at www.allergan.com or you can contact the Allergan Investor Relations Department by calling 714-246-4636.
About Allergan, Inc.
Allergan is a multi-specialty health care company established more than 60 years ago with a commitment to uncover the best of science and develop and deliver innovative and meaningful treatments to help people reach their life's potential. Today, we have approximately 10,500 highly dedicated and talented employees, global marketing and sales capabilities with a presence in more than 100 countries, a rich and ever-evolving portfolio of pharmaceuticals, biologics, medical devices and over-the-counter consumer products, and state-of-the-art resources in R&D, manufacturing and safety surveillance that help millions of patients see more clearly, move more freely and express themselves more fully. From our beginnings as an eye care company to our focus today on several medical specialties, including eye care, neurosciences, medical aesthetics, medical dermatology, breast aesthetics, obesity intervention and urologics, Allergan is proud to celebrate more than 60 years of medical advances and proud to support the patients and physicians who rely on our products and the employees and communities in which we live and work. For more information regarding Allergan, go to: www.allergan.com.
® and ™ marks owned by Allergan, Inc.
DARPin® is a registered trademark of Molecular Partners AG
Xeomin® is a registered trademark of Merz Pharma Gmbh & Co.
Revitalash®is a registered trademark of Athena Cosmetics, Inc.
Condensed Consolidated Statements of Earnings and
Reconciliation of Non-GAAP Adjustments
|Three months ended|
In millions, except per share amounts
|September 30, 2012||September 30, 2011|
|Product net sales||$||1,391.1||$||--||$||1,391.1||$||1,311.1||$||--||$||1,311.1|
|Operating costs and expenses|
|Cost of sales (excludes amortization of |
acquired intangible assets)
|Selling, general and administrative||540.8||(3.6|
|Research and development||293.3||(62.5|
|Amortization of acquired intangible assets||33.2||(27.4|
|Impairment of intangible assets and related costs||--||--||--||4.3||(4.3|
|Restructuring charges (reversal)||3.8||(3.8|
|Non-operating income (expense)|
|Earnings before income taxes||330.8||104.4||435.2||356.8||34.7||391.5|
|Provision for income taxes||80.2|
|Net earnings attributable to noncontrolling interest||1.2||--||1.2||1.2||--||1.2|
|Net earnings attributable to Allergan, Inc.||$||249.4||$||75.6||$||325.0||$||249.8||$||34.3||$||284.1|
|Net earnings per share attributable to |
Allergan, Inc. stockholders:
|Weighted average number of common |