Allergan Reports Third Quarter 2013 Operating Results
(IRVINE, Calif., October 29, 2013) - Allergan, Inc. (NYSE: AGN) today announced operating results for the quarter ended September 30, 2013. Allergan also announced that its Board of Directors has declared a third quarter dividend of $0.05 per share, payable on December 11, 2013 to stockholders of record on November 20, 2013. As a result of Allergan's approved plan to sell its obesity intervention business unit, the financial results from that business unit are reported as discontinued operations in the financial tables of this press release. Prior year amounts have been retrospectively revised for the discontinued operations.
Operating Results Attributable to Stockholders from Continuing Operations
For the quarter ended September 30, 2013:
- Allergan reported $1.10 diluted earnings per share attributable to stockholders compared to $0.82 diluted earnings per share attributable to stockholders for the third quarter of 2012.
- Allergan reported $1.23 non-GAAP diluted earnings per share attributable to stockholders compared to $1.04 non-GAAP diluted earnings per share attributable to stockholders for the third quarter of 2012, an 18.3 percent increase.
Product Sales from Continuing Operations
For the quarter ended September 30, 2013:
- Allergan reported $1,528.4 million total product net sales. Total product net sales increased 12.9 percent compared to total product net sales in the third quarter of 2012. On a constant currency basis, total product net sales increased 14.0 percent compared to total product net sales in the third quarter of 2012.
- Total specialty pharmaceuticals net sales increased 12.8 percent, or 13.9 percent on a constant currency basis, compared to total specialty pharmaceuticals net sales in the third quarter of 2012.
- Total medical devices net sales increased 13.4 percent, or 14.6 percent on a constant currency basis, compared to total medical devices net sales in the third quarter of 2012.
"We are pleased with our continued broad based double digit sales and earnings growth performance during the third quarter driven by both our pharmaceutical and medical device businesses," said David E.I. Pyott, Allergan's Chairman of the Board and Chief Executive Officer. "Furthermore, we are excited by the recent FDA approvals of JUVÉDERM VOLUMA™ XC and BOTOX® Cosmetic for crow's feet lines."
Product and Pipeline Update
During the third quarter of 2013:
- On September 11, 2013, Allergan announced the approval by the U.S. Food and Drug Administration (FDA) to market BOTOX® Cosmetic (onabotulinumtoxinA), for an additional indication to temporarily treat moderate to severe lateral canthal lines, commonly known as "crow's feet" lines. BOTOX® Cosmetic is the first and only product of its kind approved for this indication.
- On September 25, 2013, Allergan announced that it had entered into a license agreement pursuant to which, upon closing, Allergan will pay Medytox an upfront payment of U.S. $65 million and Medytox will grant Allergan exclusive rights, worldwide outside of Korea, to develop and, if approved, commercialize certain neurotoxin product candidates currently in development, including a potential liquid-injectable product. Pursuant to the agreement, Allergan has also agreed to make additional contingent payments upon achieving certain development and commercialization milestones and pay royalties on product sales. The closing of the transaction is contingent on obtaining certain government approvals.
Following the end of the third quarter of 2013:
- On October 23, 2013, Allergan announced that it had received approval from the U.S. Food and Drug Administration (FDA) to market JUVÉDERM VOLUMA™ XC, the first and only filler approved to temporarily correct age-related volume loss in the cheek area in adults over the age of 21.
- On October 23, 2013, Allergan announced that VISTABEL® received a Positive Opinion from the Agence Nationale de Sécurité du Médicament et des Produits de Santé (ANSM) for the temporary improvement in the appearance of moderate to severe lateral canthal lines (crow's feet lines) seen at maximum smile, either alone or when treated at the same time as glabellar (or frown) lines seen at maximum frown in adult patients. This is an important step towards securing national licences in the twenty seven countries of the European Union as well as Norway and Iceland.
- " On October 28, 2013, Allergan entered into a definitive agreement to sell its obesity intervention business to Apollo Endosurgery, Inc. for an up-front cash payment of $75 million, subject to certain adjustments, and certain additional consideration, including a $15 million minority equity interest in Apollo and contingent consideration of up to $20 million to be paid upon the achievement of certain regulatory and sales milestones. The transaction is expected to close in 2013, subject to customary closing conditions. In the third quarter of 2013, Allergan recorded an additional non-cash pre-tax disposal loss of $58.7 million ($37.6 million after tax) from the write-down of the obesity intervention business unit assets held for sale to their estimated fair value based on the terms of the sale agreement.
For the full year of 2013, Allergan expects:
- Total product net sales between $6,125 million and $6,200 million, which excludes the obesity intervention business.
- Total specialty pharmaceuticals net sales between $5,295 million and $5,350 million.
- Total medical devices net sales between $830 million and $850 million.
- ALPHAGAN® franchise product net sales between $470 million and $480 million.
- LUMIGAN® franchise product net sales between $620 million and $640 million.
- RESTASIS® product net sales between $900 million and $920 million.
- BOTOX® product net sales between $1,960 million and $2,000 million.
- LATISSE® product net sales at approximately $110 million.
- Breast aesthetics product net sales between $380 million and $390 million.
- Facial aesthetics product net sales between $450 million and $460 million.
- Non-GAAP cost of sales to product net sales ratio at approximately 13%.
- Non-GAAP other revenue at approximately $100 million.
- Non-GAAP selling, general and administrative expenses to product net sales ratio at approximately 38%.
- Non-GAAP research and development expenses to product net sales ratio at approximately 16.5%.
- Non-GAAP amortization of intangible assets at approximately $10 million. This expectation excludes the amortization of certain intangible assets associated with business combinations, asset purchases and product licenses.
- Non-GAAP diluted earnings per share attributable to stockholders from continuing operations between $4.74 and $4.76, which includes the dilutive impact of the acquisition of MAP Pharmaceuticals, and excludes the 2012 impact of the Research and Development tax credit, which was signed into law on January 2, 2013 and retroactively reinstated to January 1, 2012.
- Diluted shares outstanding at approximately 302 million.
- Effective tax rate on non-GAAP earnings from continuing operations between 26% and 27%.
For the fourth quarter of 2013, Allergan expects:
- Total product net sales between $1,585 million and $1,660 million, which excludes the obesity intervention business.
- Non-GAAP diluted earnings per share attributable to stockholders from continuing operations between $1.31 and $1.33, which includes the dilutive impact of the acquisition of MAP Pharmaceuticals.
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 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 from continuing operations, non-GAAP provision for income taxes, non-GAAP earnings from discontinued operations, non-GAAP expected loss on sale of discontinued operations, 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 including the transaction with Medytox, the contemplated sale of the obesity intervention business, market potential, expected growth and regulatory approvals of LEVADEX® and other products 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, political instability, 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 2012 Annual Report on Form 10-K and any 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 11,400 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.
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