Allergan Reiterates Plan to Preempt Valeant Offer

NEW YORK (The Deal) -- Allergan (AGN) is sticking to script with its second quarter earnings, announcing that it will continue on a cost reduction regime and will execute a merger, likely before Pershing Square Capital Management pulls together a special meeting regarding Valeant Pharmaceuticals International's (VRX) $52 billion unsolicited bid.

In doing so, Allergan said on its earnings call Monday that it is looking pragmatically at how it can present a transaction to its shareholders that will in short order serve to sidestep Valeant. Allergan's remarks are not unexpected, but aggressive within the context of the takeover battle.

Allergan said its operating results for the second quarter were $1.37 in earnings per share, compared to $1.17 last year and $1.83 billion in sales up 16% from the prior year. Allergan said it is outstripping the competition in opthalmolics and that Botox in its various channels is performing well. The company said its programs for Botox in migraine and urology were promising. Allergan is continuing its plan to cut costs and is reducing its non-sales workforce by 1500 employees, or 13% of its workers. Allergan sees double digit sales growth and greater that 20% earnings per share growth.

Allergan sniped a bit at Valeant regarding market share gains and regarding its positive outlook for the facial aesthetics market, which it claims to have taken share from Valeant since its hostile bid was launched and where it is growing market share in Europe over double the markets expansive growth. Allergan also urged shareholders to look at the affect inventory and promotions will have on Valeant's Bausch & Lomb Inc. financial performance quarter over quarter--yet another indication that Allergan's outlook does not include any near-term break in its rejection of the Valeant approach.

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