Allergan Reports Fourth Quarter Operating Results
- Pharmaceutical Sales Increased 27.4 Percent for the Fourth Quarter
- Board of Directors Declares Fourth Quarter Dividend
(IRVINE, Calif., January 28, 2004)-- Allergan, Inc. (NYSE: AGN) today announced operating results for the fourth quarter ended December 31, 2003. Allergan also announced that its Board of Directors has declared a fourth quarter dividend of $0.09 per share, payable on March 18, 2004 to stockholders of record on February 18, 2004.
Operating Results
For the quarter ended December 31, 2003:
- Allergan's net sales were $479.4 million, including $19.7 million of non-pharmaceutical product sales primarily consisting of contract manufacturing sales to Advanced Medical Optics, Inc. (AMO), a former subsidiary that was spun-off from Allergan on June 29, 2002.
- Pharmaceutical sales were up 27.4 percent, or 22.3 percent at constant currency, compared to pharmaceutical sales in the fourth quarter of 2002.
- Allergan reported a $0.70 diluted loss per share, including charges related to the acquisition of Oculex Pharmaceuticals, Inc., the write-off of unamortized origination fees associated with the retirement of Allergan's Liquid Yield Option Notes due 2020 ("LYONs"), the effects of an unrealized gain on the mark-to-market adjustment to foreign currency derivative instruments, and the reversal of restructuring charges and asset write-offs totaling $179.1 million pre-tax, compared to the $0.49 diluted earnings per share reported for the fourth quarter of 2002.
- Allergan's adjusted diluted earnings per share was $0.67, excluding charges related to the acquisition of Oculex Pharmaceuticals, Inc., the write-off of unamortized origination fees associated with the retirement of the LYONs , the effects of the unrealized gain, and the reversal of restructuring charges and asset write-offs representing a 24.1 percent increase compared to the adjusted diluted earnings per share of $0.54 reported for the fourth quarter of 2002. A reconciliation of the adjustments made from reported earnings per share to adjusted earnings per share is contained in the financial tables of this document.
"We are very pleased with the many accomplishments of 2003, including several key product approvals and launches, the acquisition of Oculex Pharmaceuticals, Inc., and sales growth in excess of earnings growth," said David E.I. Pyott, Chairman of the Board, President and Chief Executive Officer.
After more than 20 years of distinguished service to Allergan, Dr. Lester Kaplan, Executive Vice President of Research & Development has decided to take early retirement from the Company once a successor is in place. Dr. Kaplan has agreed to be available as an advisor to the CEO on R&D matters until the summer of 2005. David Pyott, Chairman, President & CEO commented: "Dr. Kaplan's contribution to the Company has been significant as Allergan's R&D team, under his leadership, has produced a rich stream of world class innovative products, particularly in the last 5 years as our R&D organization has undergone massive expansion. As our R&D group has rapidly evolved, Les has built up a strong leadership team both in clinical development and discovery. His ability to choose winning compounds and to assemble a first class portfolio of projects has been among his greatest and consistent achievements." Allergan is in the process of evaluating a number of internal candidates as well as external applicants for this critical role for ensuring Allergan's long term success. Dr. Lester Kaplan commented: "With a very strong and accomplished R&D management team in place and a pipeline which is the most exciting in our history, I believe this is an excellent time for an orderly transition of R&D leadership at Allergan. Therefore, I have decided to take this opportunity to pursue personal interests outside the sphere of the full time corporate environment."
For full year 2003, therapeutic sales accounted for approximately 60% of total Botox® sales and therapeutic sales grew at approximately 25% in constant currency. For full year 2003, cosmetic sales accounted for approximately 40% of total Botox® sales and cosmetic sales grew at approximately 25% in constant currency.
Product and Pipeline Update
During the fourth quarter of 2003:
- Allergan received approval in Canada for Combigan™ (a combination product of Alphagan® and timolol).
- Allergan completed the acquisition of Oculex Pharmaceuticals, Inc.
- Allergan submitted a new drug application to the United States Food & Drug Administration (FDA) for oral tazarotene, a highly selective retinoid, for the treatment of moderate to severe psoriasis.
- Allergan received approval in the United States from the FDA for Elestat™ (epinastine ophthalmic solution 0.05%) for the prevention of itching associated with allergic conjunctivitis.
- Allergan announced that the United States District Court for the Northern District of California ruled in favor of Allergan, Inc. and Syntex LLC in their patent infringement suit against Apotex, Inc., Apotex Corp., and Novex Pharma (the "Apotex Defendants"). As a result of the court's ruling, the Apotex Defendants should not be permitted to market a generic version of Acular® until U.S. Patent No. 5,110,493 expires in 2009.
- Allergan secured the Asia marketing rights for Restasis® outside Japan.
Following the end of the fourth quarter of 2003:
- Allergan announced that the Apotex Defendants dismissed their antitrust lawsuit against Allergan and Roche Palo Alto, LLC.
- The European Commission approved Lumigan® as first-line therapy in the reduction of elevated intraocular pressure in chronic open-angle glaucoma and ocular hypertension.
Partnering Activities
- Consistent with prior statements regarding maximizing the value of Allergan's assets, Allergan has initiated a process to partner Lumigan® in Japan, and spin out its early stage retinoid technology.
- Allergan announced plans to initiate a process to out-license the oral formulation of tazarotene for indications in both psoriasis and acne outside North America. In North America, Allergan currently intends to seek an acne development partner for oral tazarotene Phase 3 clinical trials.
- Allergan and Inspire Pharmaceuticals Inc. entered into a co-promotion agreement in the United States for Elestat™ resulting in Inspire having the primary responsibility for selling, promotional and marketing activities related to Elestat™.
Outlook
For the first quarter of 2004, Allergan estimates:
- Total pharmaceutical only sales between $425 million and $445 million.
- Adjusted diluted earnings per share between $0.58 and $0.59.
For the second and third quarters of 2004, Allergan estimates diluted earnings per share growth between 17 percent and 19 percent compared to the second and third quarters of 2002.
For the full year of 2004, Allergan estimates:
- Total pharmaceutical only sales between $1,850 million and $1,925 million.
- Alphagan® Franchise sales between $200 million and $240 million.
- Lumigan® sales between $210 million and $235 million.
- Restasis® sales between $75 million and $95 million.
- Botox® sales between $660 million and $700 million.
- Tazorac® and Avage® sales between $85 million and $95 million.
- Contract Sales to AMO between $80 million and $100 million.
- Pharmaceutical only income statement ratios as follows:
- Gross Profit approximately 83% to 84%.
- Research and Development approximately 18%.
- SG&A approximately 38% to 39%.
- Full year adjusted diluted earnings per share between $2.72 and $2.75. Adjusted diluted earnings per share guidance excludes any one-time items.
- Full year diluted shares outstanding between 133 million and 134 million.
- Days sales outstanding between 55 and 60 days.
- Days on hand inventory approximately 90 days.
Forward-Looking Statements
In this press release, the statements regarding the outlook for Allergan's earnings per share and revenue forecasts, and statements from Mr. Pyott, among other statements above, 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 a quarter's end and year's end. Therefore, Allergan will not report or comment on its progress during a current quarter. Any statement made by others with respect to progress during a current quarter cannot be attributed to Allergan.
Any other statements in this press release that refer to Allergan's expected, estimated or anticipated future results are forward-looking statements. 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, 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; 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 litigations, 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, matters generally affecting the economy, such as changes in interest and currency exchange rates; international relations; and the state of the economy worldwide, can 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.
Additional information concerning these 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 "Certain Factors and Trends Affecting Allergan and its Businesses" in Allergan's 2002 Form 10-K and Allergan's Form 10-Q for the quarter ended September 26, 2003. Copies of Allergan's press releases and additional information about Allergan is available on the World Wide Web at www.allergan.com or you can contact the Allergan Investor Relations Department by calling 714-246-4636.
About Allergan, Inc.
Allergan, Inc., with headquarters in Irvine, California, is a technology-driven, global health care company providing eye care and specialty pharmaceutical products worldwide. Allergan develops and commercializes products in the eye care, neuromodulator, skin care and other specialty markets that deliver value to our customers, satisfy unmet medical needs, and improve patients' lives.
Allergan Contacts
Jim Hindman (714) 246-4636 (investors)
Joann Bradley (714) 246-4766 (investors)
Stephanie Fagan (714) 246-5232 (media)
