Allergan Reports Third Quarter 2009 Operating Results.* Board of Directors Declares Third Quarter Dividend IRVINE, Calif. -- Allergan, Inc. (NYSE NYSE See: New York Stock Exchange : AGN AGN Again (Amateur Radio) AGN Active Galactic Nucleus AGN Acute Glomerulonephritis AGN Accountants Global Network AGN Air Gabon (ICAO code) ) today announced operating results for the quarter ended September 30, 2009. Allergan also announced that its Board of Directors has declared a third quarter dividend of $0.05 per share, payable on November 30, 2009 to stockholders of record on November 9, 2009. Operating Results Attributable to Stockholders For the quarter ended September 30, 2009: * Allergan reported $0.58 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of attributable to stockholders compared to $0.54 diluted earnings per share attributable to stockholders reported for the third quarter of 2008. * Allergan's non-GAAP diluted earnings per share attributable to stockholders were $0.70 in the third quarter of 2009, compared to non-GAAP diluted earnings per share attributable to stockholders of $0.65 in the third quarter of 2008, a 7.7 percent increase. Product Sales For the quarter ended September 30, 2009: * Allergan's total product net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight were $1,127.8 million. Total product net sales increased 4.2 percent compared to total product net sales in the third quarter of 2008. On a constant currency basis, total product net sales increased 7.0 percent compared to total product net sales in the third quarter of 2008. * Total specialty pharmaceuticals net sales increased 7.8 percent, or 10.7 percent on a constant currency basis, compared to total specialty pharmaceuticals net sales in the third quarter of 2008. * Total medical devices net sales decreased 10.6 percent, or 8.3 percent on a constant currency basis, compared to total medical devices net sales in the third quarter of 2008. "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," said David E.I. Pyott, Allergan's Chairman of the Board and Chief Executive Officer. "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. We are also pleased that we filed, with the U.S. Food and Drug Administration (FDA), BOTOX[R] (onabotulinumtoxinA) for chronic migraine as well as for upper limb spasticity spasticity /spas·tic·i·ty/ (spas-tis´i-te) the state of being spastic; see spastic (2). spas·tic·i·ty n. 1. A spastic state or condition. 2. Spastic paralysis. ." Product and Pipeline Update During the third quarter of 2009: * On July 7, 2009, a joint venture was created in Korea with Samil Pharmaceutical Co. Ltd. following decades of partnership to establish a leading position in ophthalmic pharmaceuticals. * On July 7, 2009, Senju Pharmaceutical Co., Ltd received approval from the Japanese Ministry of Health, Labour and Welfare for LUMIGAN[TM] Ophthalmic Solution ophthalmic solution n. A sterile solution that is free from foreign particles and is compounded and dispensed for eyedrops. 0.03% for the treatment of glaucoma or ocular hypertension. Allergan and Senju had previously entered into an exclusive licensing agreement in Japan to market and develop LUMIGAN[TM]within the ophthalmic specialty area. Senju will pay Allergan a royalty based on LUMIGAN[TM]sales in Japan. * On July 14, 2009, Allergan announced Korea Food and Drug Administration (KFDA KFDA Korea Food & Drug Administration KFDA Kansas Funeral Directors and Embalmers Association ) approval of LATISSE[R] (bimatoprost ophthalmic solution) 0.03%, a novel treatment for eyelash eyelash /eye·lash/ (-lash) cilium; one of the hairs growing on the edge of an eyelid. eye·lash n. 1. Any of the short hairs fringing the edge of the eyelid. Also called cilium. hypotrichosis, or inadequate eyelashes. LATISSE[R] is the first and only science-based treatment approved by the FDA and KFDA to enhance eyelash prominence as measured by increases in length, thickness and darkness of eyelashes. * On July 23, 2009, Allergan announced FDA approval of ACUVAIL[TM] (ketorolac tromethamine ketorolac tromethamine Acular, Acular LS Pharmacologic class: Nonsteroidal anti-inflammatory drug (NSAID) Therapeutic class: Analgesic, antipyretic, anti-inflammatory Pregnancy risk category C ophthalmic solution) 0.45%, an advanced, preservative-free formulation of ketorolac, a nonsteroidal anti-inflammatory drug nonsteroidal anti-inflammatory drug, a drug that suppresses inflammation in a manner similar to steroids, but without the side effects of steroids; commonly referred to by the acronym NSAID (ĕn`sĕd). indicated for the treatment of pain and inflammation following cataract surgery Cataract Surgery Definition Cataract surgery is a procedure performed to remove a cloudy lens from the eye; usually an intraocular lens is implanted at the same time. Purpose The purpose of cataract surgery is to restore clear vision. . * On September 15, 2009, a collaboration agreement with Pieris Noun 1. Pieris - decorative evergreen shrubs of woody vines genus Pieris dilleniid dicot genus - genus of more or less advanced dicotyledonous trees and shrubs and herbs Ericaceae, family Ericaceae, heath family - heathers AG was announced that combines Pieris' proprietary Anticalin technology with Allergan's expertise in drug delivery and ophthalmic drug development with a goal of developing agents for the treatment of serious ocular disorders. * On September 25, 2009, Allergan and Quintiles Transnational Corp. announced an agreement under which Quintiles will co-promote Allergan's SANCTURA XR[R] (trospium chloride trospium chloride Regurin (UK), Sanctura Pharmacologic class: Anticholinergic, antimuscarinic Therapeutic class: Renal and genitourinary agent, antispasmodic Pregnancy risk category C extended release capsules), an anticholinergic approved for the treatment of overactive bladder Overactive Bladder DefinitionOveractive bladder is the leakage of large amounts of urine at unexpected times, including during sleep. Description , predominantly to primary care physicians in the United States. * Allergan filed a supplemental Biologics License Application (sBLA) with the FDA for the use of BOTOX[R] (onabotulinumtoxinA) to treat chronic migraine. * Allergan submitted to the FDA the additional information requested by the FDA in its complete response letter regarding Allergan's sBLA for BOTOX[R] to treat upper limb spasticity. * Allergan filed a supplemental Premarket Approval premarket approval Medical devices A scientific and regulatory review by the FDA to ensure the safety and effectiveness of a Class III device, before its approval for marketing. See Advisory panel, Medical device. application with the FDA for the LAP-BAND[R] System to treat weight reduction for severely obese adolescent patients (ages 14-17). Following the end of the third quarter of 2009: * On October 1, 2009, Allergan filed a declaratory relief declaratory relief n. a judge's determination (called a "declaratory judgment") of the parties' rights under a contract or a statute often requested (prayed) for information in a lawsuit over a contract. action in the United States District Court for the District of Columbia The United States District Court for the District of Columbia is the United States District Court that hears cases originating in the District of Columbia over which federal courts have original jurisdiction. to seek a ruling that would allow the company to proactively share truthful and relevant information with the medical community regarding the safe use of BOTOX[R] for certain therapeutic off-label treatments. * On October 23, 2009, Allergan announced that the Committee for Medicinal Products for Human Use “CHMP” redirects here. For French language Canadian radio station, see CHMP-FM. CPMP, Committee for Proprietary Medicinal Products, now CHMP Committee for Medicinal Products for Human Use recommended granting a Marketing Authorization for LUMIGAN[R] (bimatoprost ophthalmic solution) 0.01% in the 27 member states of the European Union. * On October 23, 2009, Allergan announced that the United States District Court for the District of Delaware The United States District Court for the District of Delaware is the Federal district court having jurisdiction over the entire state of Delaware. The Court sits in Wilmington. Currently, three judges and two magistrate judges preside over the court. ruled in favor of Allergan, Inc. in its patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. suit against Exela PharmSci, Inc., Exela PharmSci Pvt., Ltd., Apotex, Inc. and Apotex Corp. (collectively, the "Defendants") finding that the patents are valid and enforceable against the Defendants and that the Defendants' proposed generic versions of Allergan's ALPHAGAN[R] P (brimonidine tartrate tartrate /tar·trate/ (tahr´trat) a salt of tartaric acid. tar·trate n. A salt or ester of tartaric acid. tartrate a salt of tartaric acid. ophthalmic solution) 0.1% and 0.15% products infringe Allergan's patents. Pursuant to the Hatch-Waxman Act, the FDA is required to delay approval of the Defendants' proposed generic products until after Allergan's last applicable patent expires in 2022. * Allergan filed a supplemental New Drug Application with the FDA for the approval of OZURDEX[TM] (dexamethasone dexamethasone /dex·a·meth·a·sone/ (dek?sah-meth´ah-son) a synthetic glucocorticoid used primarily as an antiinflammatory in various conditions, including collagen diseases and allergic states; it is the basis of a screening test in the intravitreal implant) 0.7 mg to treat non-infectious intermediate and posterior uveitis uveitis Inflammation of the uvea, the middle coat of the eyeball. Anterior uveitis, involving the iris or ciliary body (containing the muscle that adjusts the lens) or both, can lead to glaucoma and blindness. . Outlook For the full year of 2009, Allergan estimates: * Total product net sales between $4,350 million and $4,400 million. * Total specialty pharmaceuticals net sales between $3,635 million and $3,655 million. * Total medical devices net sales between $715 million and $745 million. * ALPHAGAN[R] franchise product net sales between $380 million and $390 million. * LUMIGAN[R] franchise product net sales between $450 million and $460 million. * RESTASIS[R] product net sales between $500 million and $510 million. * SANCTURA[R] franchise product net sales at approximately $70 million. * BOTOX[R] product net sales between $1,280 million and $1,290 million. * LATISSE[R] product net sales at approximately $70 million. * Breast aesthetics product net sales between $270 million and $280 million. * Obesity intervention product net sales between $245 million and $255 million. * Facial aesthetics product net sales between $200 million and $210 million. * Non-GAAP cost of sales to product net sales ratio between 16.5% and 17.0%. * Other revenue at approximately $60 million. * Non-GAAP selling, general and administrative expenses to product net sales ratio between 40% and 41%. * Non-GAAP research and development expenses to product net sales ratio between 15% and 16%. * Non-GAAP amortization of acquired intangible assets at approximately $20 million. This guidance excludes the amortization of acquired intangible assets associated with the Inamed, Corneal corneal pertaining to the cornea. See also keratitis, keratopathy. corneal anomaly includes microcornea, coloboma, megalocornea, dermoid, congenital opacity. corneal black body see corneal sequestrum (below). , EndoArt, Esprit, and Samil acquisitions and the ACZONE[R] asset purchase. * Non-GAAP diluted earnings per share attributable to stockholders guidance between $2.75 and $2.77. * Diluted shares outstanding between approximately 304 million and 306 million. * Effective tax rate on non-GAAP earnings between 28% and 29%. For the fourth quarter of 2009, Allergan estimates: * Total product net sales between $1,110 million and $1,160 million. * Non-GAAP diluted earnings per share attributable to stockholders guidance between $0.75 and $0.77. On January 1, 2009, Allergan adopted the update to Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). (FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). ) guidance related to the accounting for convertible debt instruments that may be settled fully or partially in cash upon conversion, which requires retrospective application to prior periods. The impact from the adoption of this guidance on the previously reported GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). results for the third quarter and first nine months of 2008 was a reduction of diluted earnings per share attributable to stockholders of $0.01 and $0.03, respectively, from the amounts previously reported. Non-GAAP diluted earnings per share attributable to stockholders for the third quarter and first nine months of 2008 were not impacted. Historical non-GAAP basic and diluted earnings per share attributable to stockholders and guidance amounts for non-GAAP diluted earnings per share attributable to stockholders, 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 as well as non-GAAP net sales reported in constant currency are each reconciled to the most directly comparable GAAP financial measure in the financial tables of this press release and the accompanying footnotes. The reconciliation for the guidance amounts in the financial tables includes historical non-GAAP adjustments and an estimate of the future effect from amortization of acquired intangible assets and non-cash interest expense associated with amortization of convertible debt discount. All prior period information in the financial tables of this press release has been retrospectively adjusted to reflect the impact of the adoptions in the first quarter of 2009 of updates to FASB guidance related to the accounting for convertible debt instruments that may be settled fully or partially in cash upon conversion and the accounting and financial reporting of noncontrolling ownership interests in subsidiaries held by parties other than the parent. Forward-Looking Statements In this press release, the statements regarding product development, market potential, expected growth, anticipated product filings, approvals and labeling, the statements by Mr. Pyott 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, are forward-looking statements. 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 R&D and regulatory processes; domestic and foreign health care and cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. reforms, including government pricing 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 An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called 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, as well as the general impact of the current economic crisis, 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 Securities and Exchange Commission, including the discussion under the heading "Risk Factors" in Allergan's 2008 Form 10-K and Allergan's Forms 10-Q for the quarters ended March 31, 2009 and June 30, 2009. Copies of Allergan's press releases and additional information about Allergan is available at www.allergan.com or you can contact the Allergan Investor Relations Investor relations The process by which the corporation communicates with its investors. Department by calling 714-246-4636. About Allergan, Inc. Founded in 1950, Allergan, Inc., with headquarters in Irvine, California, is a multi-specialty health care company that discovers, develops and commercializes innovative pharmaceuticals, biologics and medical devices that enable people to live life to its greatest potential - to see more clearly, move more freely, express themselves more fully. The Company employs more than 8,000 people worldwide and operates state-of-the-art R&D facilities and world-class manufacturing plants. In addition to its discovery-to-development research organization, Allergan has global marketing and sales capabilities with a presence in more than 100 countries. [R] and [TM] Marks owned by Allergan, Inc. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] "GAAP" refers to financial information presented in accordance with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting in the United States. This press release includes non-GAAP financial measures, as defined in Regulation G promulgated by the Securities and Exchange Commission, with respect to the three and nine months ended September 30, 2009 and September 30, 2008 and with respect to anticipated results for the fourth quarter and full year of 2009. Allergan believes that its presentation of non-GAAP financial measures provides useful supplementary information to investors regarding its operational performance because it enhances an investor's overall understanding of the financial performance and prospects for the future of Allergan's core business activities by providing a basis for the comparison of results of core business operations between current, past and future periods. The presentation of historical non-GAAP financial measures is not meant to be considered in isolation from or as a substitute for results as reported under GAAP. In this press release, Allergan reported the non-GAAP financial measures "non-GAAP earnings attributable to Allergan, Inc." and "non-GAAP basic and diluted earnings per share attributable to Allergan, Inc. stockholders" as well as "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 restructuring charges," "non-GAAP operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. ," "non-GAAP interest expense," "non-GAAP unrealized (loss) gain on derivative instruments," "non-GAAP gain on investments, net," "non-GAAP earnings before income taxes" and "non-GAAP provision for income taxes." Allergan uses non-GAAP earnings to enhance the investor's overall understanding of the financial performance and prospects for the future of Allergan's core business activities. Non-GAAP earnings is one of the primary indicators management uses for planning and forecasting in future periods, including trending and analyzing the core operating performance of Allergan's business from period to period without the effect of the non-core business items indicated. Management uses non-GAAP earnings to prepare operating budgets and forecasts and to measure Allergan's performance against those budgets and forecasts on a corporate and segment level. Allergan also uses non-GAAP earnings for evaluating management performance for compensation purposes. Despite the importance of non-GAAP earnings in analyzing Allergan's underlying business, the budgeting and forecasting process and designing incentive compensation, non-GAAP earnings has no standardized meaning defined by GAAP. Therefore, non-GAAP earnings has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of Allergan's results as reported under GAAP. Some of these limitations are: * it does not reflect cash expenditures, or future requirements, for expenditures relating to restructurings, and certain acquisitions, including severance and facility transition costs associated with acquisitions; * it does not reflect gains or losses on the disposition of assets associated with restructuring and business exit activities; * it does not reflect the tax benefit or tax expense associated with the items indicated; * it does not reflect the impact on earnings of charges resulting from certain matters Allergan considers not to be indicative of its on-going operations; and * other companies in Allergan's industry may calculate non-GAAP earnings differently than it does, which may limit its usefulness as a comparative measure. Allergan compensates for these limitations by using non-GAAP earnings only to supplement net earnings on a basis prepared in conformance with GAAP in order to provide a more complete understanding of the factors and trends affecting its business. Allergan strongly encourages investors to consider both net earnings and cash flows determined under GAAP as compared to non-GAAP earnings, and to perform their own analysis, as appropriate. Allergan uses the financial measures non-GAAP basic and diluted earnings per share attributable to Allergan, Inc. stockholders and non-GAAP earnings attributable to Allergan, Inc. and its subcomponents 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, and non-GAAP provision for income taxes, for its full year 2009 guidance to provide a more complete understanding of the cost components affecting its business. Allergan includes these financial measures in the determination of non-GAAP earnings to evaluate its management's performance for compensation purposes and to assist in comparing certain of its costs to its competitors' costs. These non-GAAP cost measures do not take into account the non-core business items removed in its calculations of non-GAAP earnings and non-GAAP basic and diluted earnings per share and, therefore, are subject to the same limitations discussed above. Allergan strongly encourages investors to consider both cost of sales, selling, general and administrative expenses, research and development expenses, amortization of acquired intangible assets and provision for income taxes determined under GAAP as compared to the non-GAAP amounts included in this press release. In this press release, Allergan also reported sales performance using the non-GAAP financial measure of constant currency sales. Constant currency sales represent current period reported sales adjusted for the translation effect of changes in average foreign exchange rates between the current period and the corresponding period in the prior year. Allergan calculates the currency effect by comparing adjusted current period reported amounts, calculated using the monthly average foreign exchange rates for the corresponding period in the prior year, to the actual current period reported amounts. Management refers to growth rates at constant currency so that sales results can be viewed without the impact of changing foreign currency exchange rates, thereby facilitating period-to-period comparisons of Allergan's sales. Generally, when the dollar either strengthens or weakens against other currencies, the growth at constant currency rates will be higher or lower, respectively, than growth reported at actual exchange rates. Reporting sales performance using constant currency sales has the limitation of excluding currency effects from the comparison of sales results over various periods, even though the effect of changing foreign currency exchange rates has an actual effect on Allergan's operating results. Investors should consider these effects in their overall analysis of Allergan's operating results. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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