Allergan Reports First Quarter 2013 Operating Results
Acquisition of MAP Pharmaceuticals Completed
IRVINE, Calif.--(BUSINESS WIRE)-- Allergan, Inc. (NYSE: AGN) today announced operating results for the quarter ended March 31, 2013. Allergan also announced that its Board of Directors has declared a first quarter dividend of $0.05 per share, payable on June 13, 2013 to stockholders of record on May 23, 2013. As a result of Allergan's approved plan to sell 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 March 31, 2013:
Allergan reported $0.89 diluted earnings per share attributable to stockholders compared to $0.74 diluted earnings per share attributable to stockholders for the first quarter of 2012.
- Diluted earnings per share for the first quarter of 2013 include the full year 2012 impact of the U.S. Research and Development tax credit, which was signed into law on January 2, 2013 and retroactively reinstated to January 1, 2012. The estimated impact of the retroactive Research and Development tax credit for 2012 is approximately $17.3 million, or $0.06 diluted earnings per share attributable to stockholders for the first quarter of 2013.
Allergan reported $0.98 non-GAAP diluted earnings per share attributable to stockholders compared to $0.83 non-GAAP diluted earnings per share attributable to stockholders for the first quarter of 2012, an 18.1 percent increase.
- Non-GAAP diluted earnings per share attributable to stockholders exclude the full year 2012 impact of the U.S. Research and Development tax credit.
Product Sales from Continuing Operations
For the quarter ended March 31, 2013:
Allergan reported $1,432.5 million total product net sales. Total product net sales increased 8.4 percent compared to total product net sales in the first quarter of 2012. On a constant currency basis, total product net sales increased 9.0 percent compared to total product net sales in the first quarter of 2012.
- Total specialty pharmaceuticals net sales increased 8.1 percent, or 8.7 percent on a constant currency basis, compared to total specialty pharmaceuticals net sales in the first quarter of 2012.
- Total medical devices net sales increased 10.2 percent, or 10.5 percent on a constant currency basis, compared to total medical devices net sales in the first quarter of 2012.
"In the first quarter, Allergan generated strong sales and earnings growth," said David E.I. Pyott, Allergan's Chairman of the Board, President and Chief Executive Officer. "We are pleased with the rapid integration of SkinMedica, the completion of the MAP Pharmaceuticals acquisition and are committed to bringing LEVADEX® as an innovative therapy for migraine to market."
Product and Pipeline Update
During the first quarter of 2013:
- On January 18, 2013, Allergan announced that the U.S. Food and Drug Administration (FDA) approved BOTOX® (onabotulinumtoxinA) for the treatment of overactive bladder with symptoms of urge urinary incontinence, urgency and frequency in adults who have had an inadequate response to or are intolerant of an anticholinergic medication.
- On January 22, 2013, Allergan and MAP Pharmaceuticals announced that they entered into a definitive merger agreement whereby Allergan would acquire 100% of the shares of MAP Pharmaceuticals for a price of $25.00 per share. On March 1, 2013, Allergan completed the acquisition of MAP Pharmaceuticals, a biopharmaceutical company focused on developing and commercializing new therapies in Neurology, including LEVADEX® (dihydroergotamine) inhalation aerosol for the acute treatment of migraine in adults. LEVADEX® is currently under review with the FDA.
- On January 29, 2013, Allergan restructured its collaboration agreement with Spectrum Pharmaceuticals, Inc. ("Spectrum") pursuant to which Spectrum reacquired all rights from Allergan under the collaboration agreement in exchange for agreeing to pay Allergan a royalty on future net sales of specified products. Going forward, Allergan will have no further obligations under the agreement to share development costs or perform any development, regulatory or other activities.
- On February 1, 2013, Allergan completed its previously announced review of strategic options for maximizing the value of its obesity intervention business, and has formally committed to pursue a sale of that business unit. Accordingly, Allergan has begun to consider offers for the sale of that business unit and currently expects to execute a signed agreement by the middle of 2013. As a result of Allergan's approved plan to sell its obesity intervention business unit, beginning in the first quarter of 2013, the financial results from that business unit are reported as discontinued operations in Allergan's statement of earnings and the related net assets are presented as assets and liabilities held for sale in Allergan's balance sheet. Prior period statements of earnings and the balance sheet as of December 31, 2012 have been retrospectively revised to reflect the financial results of the obesity intervention business unit as discontinued operations and the related assets and liabilities as held for sale. In the first quarter of 2013, Allergan also reported a separate non-cash pre-tax disposal loss of $346.2 million ($259.0 million after tax) from the write-down of the net assets held for sale to their estimated fair value less costs to sell. As previously stated, Allergan intends to offset any potential non-GAAP earnings dilution related to this transaction.
- On February 20, 2013, Allergan announced that the FDA approved the NATRELLE® 410 Highly Cohesive Anatomically Shaped Silicone-Filled Breast Implants for use in breast reconstruction, augmentation and revision surgery.
Following the end of the first quarter of 2013:
- On April 16, 2013, Allergan announced that the FDA issued a Complete Response Letter (CRL) to its New Drug Application (NDA) for LEVADEX® (dihydroergotamine) inhalation aerosol for the acute treatment of migraine in adults. Allergan is pleased that, in addition to the response, the company has already received draft labeling from the FDA. Allergan anticipates minimal revisions to this labeling. The company is committed to bringing LEVADEX® to market as a potential new acute treatment to address a significant unmet need among the millions of people living with debilitating migraines. The main issues cited in the CRL were already identified by the FDA in prior discussions with Allergan. Allergan has already taken actions to address these concerns, including the April 12, 2013 acquisition of Exemplar Pharma, LLC, the canister filling unit manufacturer, for less than $20 million.
- On the May 1, 2013 first quarter earnings call, Allergan will provide an update on both the DARPin® and Bimatoprost Scalp Phase II clinical programs.
For the full year of 2013, Allergan expects:
Total product net sales between $5,975 million and $6,200 million, which excludes the obesity intervention business.
- Total specialty pharmaceuticals net sales between $5,175 million and $5,340 million.
- Total medical devices net sales between $800 million and $860 million.
- ALPHAGAN® franchise product net sales between $440 million and $470 million.
- LUMIGAN® franchise product net sales between $630 million and $660 million.
- RESTASIS® product net sales between $850 million and $890 million.
- BOTOX® product net sales between $1,920 million and $2,000 million.
- LATISSE® product net sales at approximately $110 million.
- Breast aesthetics product net sales between $390 million and $420 million.
- Facial aesthetics product net sales between $410 million and $440 million.
- Non-GAAP cost of sales to product net sales ratio at approximately 13.5%.
- Non-GAAP other revenue at approximately $90 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 amortization of intangible assets at approximately $10 million. This expectation excludes the amortization of certain intangible assets associated with business combinations, asset purchases and product licenses.
- Non-GAAP diluted earnings per share attributable to stockholders from continuing operations between $4.70 and $4.76, which includes the dilutive impact of the acquisition of MAP Pharmaceuticals, and excludes the 2012 impact of the Research and Development tax credit, which was signed into law on January 2, 2013 and retroactively reinstated to January 1, 2012.
- Diluted shares outstanding at approximately 303 million.
- Effective tax rate on non-GAAP earnings from continuing operations between 26% and 27%.
For the second quarter of 2013, Allergan expects:
- Total product net sales between $1,500 million and $1,575 million, which excludes the obesity intervention business.
- Non-GAAP diluted earnings per share attributable to stockholders from continuing operations between $1.18 and $1.20, which includes the dilutive impact of the acquisition of MAP Pharmaceuticals.
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 expected 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, the contemplated sale of the obesity intervention business, 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, 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 11,100 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, obesity intervention 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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