Allergan Reports First Quarter 2014 Operating Results
Fourth Quarter Product Net Sales Increased 15%
(IRVINE, Calif., February 5, 2014) - Allergan, Inc. (NYSE: AGN) today announced operating results for the quarter ended December 31, 2013. Allergan also announced that its Board of Directors has declared a fourth quarter dividend of $0.05 per share, payable on March 21, 2014 to stockholders of record on February 28, 2014. As a result of Allergan's sale of 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 December 31, 2013:
- Allergan reported $1.04 diluted earnings per share attributable to stockholders compared to $1.05 diluted earnings per share attributable to stockholders for the fourth quarter of 2012.
- Allergan reported $1.35 non-GAAP diluted earnings per share attributable to stockholders compared to $1.12 non-GAAP diluted earnings per share attributable to stockholders for the fourth quarter of 2012, a 20.5 percent increase.
Product Sales from Continuing Operations
For the quarter ended December 31, 2013:
- Allergan reported $1,659.6 million total product net sales. Total product net sales increased 14.6 percent compared to total product net sales in the fourth quarter of 2012. On a constant currency basis, total product net sales increased 15.6 percent compared to total product net sales in the fourth quarter of 2012.
- Total specialty pharmaceuticals net sales increased 14.0 percent, or 15.0 percent on a constant currency basis, compared to total specialty pharmaceuticals net sales in the fourth quarter of 2012.
- Total core medical devices net sales increased 17.0 percent, or 17.8 percent on a constant currency basis, compared to total core medical devices net sales in the fourth quarter of 2012.
"We are pleased to have once again achieved our double digit revenue and mid teens earnings per share growth aspirations for full year 2013 as we benefited from many regulatory approvals in the past few years," said David E.I. Pyott, Allergan's Chairman of the Board and Chief Executive Officer. "Furthermore, we look forward to delivering similar revenue and earnings growth in 2014."
Based on internal information and assumptions, full year 2013 therapeutic sales accounted for approximately 54% of total BOTOX® (onabotulinumtoxinA) sales and increased approximately 17% compared to 2012. Full year 2013 aesthetic sales accounted for approximately 46% of total BOTOX® sales and increased approximately 8% compared to 2012.
Product and Pipeline Update
During the fourth 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. Allergan has secured national licences in 19 countries of the European Union, as well as in Norway and Iceland.
- On December 2, 2013, Allergan announced that it had completed the sale of its obesity intervention business to Apollo Endosurgery, Inc. Under the terms of the agreement, which was first announced on October 29, 2013, Allergan received cash consideration of $75 million, subject to certain adjustments, and a $15 million minority equity interest in Apollo Endosurgery. Allergan may also receive up to $20 million in contingent consideration upon the achievement of certain regulatory and sales milestones.
- Allergan resubmitted the New Drug Application (NDA) to the FDA seeking approval for LEVADEX® (dihydroergotamine) inhalation aerosol for the acute treatment of migraine in adults. This resubmission is intended to address the concerns identified in the Complete Response Letter received in the second quarter of 2013.
Following the end of the fourth quarter of 2013:
- On January 7, 2014, Allergan and Medytox, Inc. announced that they have closed the license agreement which was previously announced on September 25, 2013. Under the terms of the agreement, Allergan paid Medytox an upfront cash payment of U.S. $65 million and Medytox has granted Allergan exclusive rights, worldwide outside of Korea (and co-exclusive rights in Japan), 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, including up to an aggregate of U.S. $116.5 million upon achieving certain development milestones, up to an aggregate of U.S. $180.5 million upon achieving certain commercialization milestones, and royalties on product sales.
- " On January 14, 2014, the U.S. District Court for the Eastern District of Texas (District Court) ruled in favor of Allergan in a patent infringement matter concerning the Company's LUMIGAN® (bimatoprost ophthalmic solution) 0.01% product. Allergan initiated the lawsuit under the Hatch-Waxman Act, after the defendants, Sandoz Inc., Lupin Ltd., Lupin Pharmaceuticals Inc., Hi-Tech Pharmacal Co., Inc., Watson Laboratories, Inc., Watson Pharmaceuticals, Inc., and Watson Pharma, Inc. (Defendants), sought to market a generic version of LUMIGAN® 0.01%, which was first approved by the FDA in 2010 for the reduction of elevated intraocular pressure in patients with open-angle glaucoma or ocular hypertension. The District Court found that all of the asserted claims of the 5 U.S. patents in the suit are not invalid and are infringed by Defendants' proposed generic drug products. As part of the ruling, the District Court granted Allergan's request for a permanent injunction enjoining the Defendants from marketing their proposed generic drug products until the expiration of the last of the LUMIGAN® 0.01% patents in 2027.
- The U.S. Patent and Trademark Office has issued three patents which cover the specific formulation and the method of using Allergan's RESTASIS® (cyclosporine ophthalmic emulsion) 0.05% product. On the date each patent was granted, it was submitted for listing in the FDA's Approved Drug Products With Therapeutic Equivalence Evaluations, commonly known as the Orange Book. These patents expire August 27, 2024. There remains uncertainty as to the status of any abbreviated new drug application (ANDA) filers in respect to RESTASIS®. In addition, Allergan submitted a Citizen Petition to the FDA regarding the FDA's published draft guidance that proposes certain approaches for demonstrating bioequivalence in an ANDA referring to the new drug application related to the RESTASIS® product.
For the full year of 2014, Allergan expects:
- Total product net sales between $6,650 million and $6,950 million, excluding any anticipated revenue from the transition service agreements related to the sale of the obesity intervention business.
- Total specialty pharmaceuticals net sales between $5,720 million and $5,960 million.
- Total core medical devices net sales between $930 million and $990 million.
- ALPHAGAN® franchise product net sales between $460 million and $490 million.
- LUMIGAN® franchise product net sales between $590 million and $620 million.
- RESTASIS® product net sales between $1,030 million and $1,070 million.
- BOTOX® product net sales between $2,180 million and $2,280 million.
- LATISSE® product net sales between $100 million and $110 million.
- Breast aesthetics product net sales between $390 million and $420 million.
- Facial aesthetics product net sales between $540 million and $570 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 between 37% and 38%.
- Non-GAAP research and development expenses to product net sales ratio at approximately 16.5%.
- Non-GAAP diluted earnings per share attributable to stockholders between $5.36 and $5.48.
- Diluted shares outstanding at approximately 302 million.
- Effective tax rate on non-GAAP earnings between 26% and 27%.
For the first quarter of 2014, Allergan expects:
- Total product net sales between $1,525 million and $1,600 million, excluding any anticipated revenue from the transition service agreements related to the sale of the obesity intervention business.
- Non-GAAP diluted earnings per share attributable to stockholders between $1.09 and $1.12.
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 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, 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 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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