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Allergan Reports Third Quarter 2012 Operating Results

Stocks in this article: AGN

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 net sales between $600 million and $620 million.
    • RESTASIS® product net sales between $780 million and $800 million.
    • BOTOX® product net sales between $1,760 million and $1,800 million.
    • LATISSE® product net sales at approximately $100 million.
    • Breast aesthetics product net sales between $380 million and $390 million.
    • Obesity intervention product net sales at approximately $160 million.
    • Facial aesthetics product net sales 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.

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