Allergan Gets Past Estimates

Allergan ( AGN), the maker of the wrinkle-zapper Botox, beat analysts' estimates and its own guidance for earnings in the fourth quarter.

The Irvine, Calif., company, which specializes in skin-care, eye-care and neurological products, earned $122 million, or 90 cents a share, in the last quarter of 2005, up from $112.5 million and 85 cents in the year-ago period.

Excluding charges, Allergan earned 91 cents a share, topping analysts' estimates of 89 cents a share and its November forecast of 88 cents to 89 cents a share.

Charges included those related to the termination of a supply agreement with Advanced Medical Optics ( EYE) and expenses incurred from efforts to streamline its research and development activities.

Net sales exceeded expectations as well, coming in at $594.9 million compared with Wall Street's target of $583.7 million. Pharmaceutical sales were up 11.3% from a year ago.

Sales of the Botox injection grew 12% to $227 million in the quarter, thanks in part to increased consumer acceptance of the drug and direct-to-consumer advertising, according to Allergan Chairman and CEO David Pyott. In addition, Allergan increased the price of Botox by 4% to $485 per vial of the drug, also known as botulinum toxin A.

Sales of its skin-care products disappointed, however, falling 8.5% because of fewer selling days in the quarter compared with a year earlier.

For 2006, Allergan projected earnings of $3.56 to $3.62 a share not including the impact of its acquisition of Inamed ( IMDC), a maker of cosmetic-surgery products, including breast implants. Its guidance does include a charge of 20 cents a share from stock-options expensing.

Allergan announced plans to acquire Inamed last November. Before the companies agreed to merge, Inamed had been planning to join forces with specialty pharmaceuticals company Medicis ( MRX), but Allergan's offer proved superior.

Allergan and Inamed are awaiting Federal Trade Commission clearance to seal the deal. They believe the FTC will make its final decision in the next few weeks. The acquisition has already been cleared outside of the U.S.

The financial impact of the Inamed acquisition is expected to be neutral this year, but Allergan plans to provide an update and additional 2006 guidance after it closes the takeover. Until then, Allergan is planning an R&D day on Feb. 6, when it will discuss new clinical data.

Allergan is looking to market Botox for the treatment of overactive bladders and chronic daily headaches, in addition to its current indication as a treatment to reduce the appearance of wrinkles.

Allergan has signed a licensing agreement with GlaxoSmithkline ( GSK) in which the British drug giant will promote Botox in Japan and China.

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