Allergan Inc. (AGN) on Thursday posted an 8% increase in profit for the third quarter from last year, helped by higher sales of anti-wrinkle drug Botox and other specialty pharmaceuticals that offset lower sales of medical devices. Excluding items, earnings per share for the quarter increased 8% from a year ago and matched analysts' consensus estimate. Looking ahead, the specialty drug maker raised its adjusted earnings outlook for the full year.
Botox injection, the wrinkle smoother, is Allergan's flagship product with annual sales of over $1 billion. However, with consumers cutting back on the wrinkle treatment in the face of the recession and the FDA requiring a black box labeling on Botox and similar products, Allergan had been reporting quarter-over-quarter decline in Botox sales since the fourth-quarter of last year. With the economy cutting into cosmetic procedures, sales of Allergan's facial aesthetic product portfolio, which includes Juvederm, had also taken a hit.
Third-Quarter Results
Net earnings attributable to Allergan for the third quarter rose to $179 million, or $0.58 per share, from $165.4 million, or $0.54 per share, in the year-ago period.
Non-GAAP net income for the quarter attributable to company increased to $215.4 million, or $0.70 per share, from $200.4 million, or $0.65 per share, in the same period last year. On average, twenty analysts polled by Thomson Reuters expected the company to report earnings of $0.70 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the third quarter increased 3.6% to $1.14 billion from $1.10 billion in the same period last year. Analysts were looking for revenue of $1.08 billion.
While reporting its financial results for the second quarter in July, Allergan had said it anticipates third-quarter non-GAAP earnings attributable to stockholders of $0.67-$0.69 per share, on total product net sales of $1.05 billion-$1.1 billion.
David Pyott, chairman of the Board and chief executive officer of Allergan, said, "We are pleased with our continued operational performance during the third quarter as our businesses are performing better than was expected at the beginning of 2009. With this strength in our businesses, we made the strategic decision to invest in increased Direct to Consumer advertising programs in the U.S. as we anticipate recovery from the recession."
Pyott added, "We are also pleased that we filed, with the U.S. Food and Drug Administration, Botox for chronic migraine as well as for upper limb spasticity."
Peer Performance
Among others in the sector, Genzyme Corp. (GENZ) in mid-October reported an 87% drop in profit for the third quarter from last year, reflecting the temporary shutdown and remediation of a key manufacturing facility in Boston that resulted in restricted supplies of the company's Gaucher disease drug Cerezyme and Fabry disease drug Fabrazyme. The company's GAAP net income for the third quarter was $16 million, or $0.06 per share, down from $119.60 million, or $0.42 per share, in the year-ago quarter. Revenue for the quarter declined 8.6% to $1.06 billion from $1.16 billion in the same period last year.
Other Metrics
Allergan's total product net sales for the third quarter were $1.13 billion, up 4.2% from $1.09 billion in the year-ago period. On a constant currency basis, total product net sales increased 7% from the same period last year.
During the latest quarter, sales of anti-wrinkle treatment Botox increased 3% to $327.8 million from $318.4 million in the previous-year quarter. In the preceding second quarter, the company had reported an 11% decline in sales of Botox to $336.8 million.
Total specialty pharmaceuticals sales for the quarter increased 7.8%, or 10.7% on a constant currency basis, to $940.6 million from $872.5 million a year ago.
However, sales of medical devices declined 10.6%, or 8.3% on a constant currency basis, to $187.2 million from $209.4 million in the same period last year. Sales of Facial aesthetics declined 7.9% from the year-ago period to $53.7 million. Sales of eyelash growth enhancer Latisse during the latest quarter was $22.1 million.
The company's operating income for the quarter declined to $236.5 million from $237.4 million in the year-ago quarter.
Allergan announced a third quarter cash dividend of $0.05 per share, payable on November 30, 2009 to shareholders on record as of November 9, 2009.
Year-To-Date Results
For the nine months, net earnings attributable to Allergan declined to $399.8 million, or $1.31 per share, from $416.5 million, or $1.36 per share, in the corresponding period last year.
Non-GAAP net earnings attributable to company rose to $611.7 million, or $2.00 per share, from $556.7 million, or $1.81 per share, in the same period last year.
Revenues for the nine-month period declined to $3.28 billion from $3.45 billion in the comparable year-ago period.
Outlook
For the fourth quarter of 2009, Allergan forecasts GAAP earnings per share attributable to stockholders in a range of $0.68-$0.70 and non-GAAP earnings per share in a range of $0.75-$0.77. The company projects total product net sales for the quarter between $1.11 billion and $1.16 billion. Analysts expect the company to report earnings of $0.75 per share on revenues of $1.10 billion for the fourth quarter.
For fiscal year 2009, Allergan tightened its outlook for GAAP earnings attributable to stockholders to a range of $1.98-$2.00 per share from the prior range of $1.97-$2.01 per share. The company, however, raised its outlook for non-GAAP earnings to a range of $2.75-$2.77 per share, from the prior outlook of $2.71-$2.75 per share. Analysts expect the company to report earnings of $2.75 per share for the year.
The company now expects total product net sales for the year in a range of $4.35 billion-$4.40 billion, up from the prior range of $4.2 billion-$4.3 billion. Analysts have a consensus revenue estimate for the year of $4.32 billion. Stock Quotes
In Thursday's regular trading session, AGN is currently trading at $54.61, up $1.06 or 1.98% on a volume of 1.72 million shares. In the past 52 weeks, the stock is trading in a range of $28.95-$58.95.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.