Allergan reports first quarter results.

IRVINE, Calif.--(BW HealthWire)--April 16, 1997--Allergan, Inc. (NYSE:AGN) announced first quarter 1997 worldwide sales of $256.2 million, a decrease of $1.9 million or 1 percent from the first quarter of 1996. Excluding the impact of foreign currency changes, sales increased 2 percent or $5.5 million over the first quarter of 1996. Sales in markets outside the United States represented 58 percent of the company's sales in the first quarter of 1997.

Earnings per share for the first quarter of 1997 were $0.27 compared to $0.35 for the first quarter of 1996. The decline in operating results is primarily due to launch expenses for new products and the continuing competitive pressures on the eye care business, as well as the impact of foreign currency fluctuations. Foreign currency changes accounted for approximately one half of the decline in earnings per share in the first quarter of 1997. Foreign currency changes, at current exchange rates, are expected to adversely affect the second quarter of 1997 and the year as a whole to a more significant degree than our earlier estimates. Further strengthening of the dollar would increase the negative impact on sales and earnings comparisons.

Eye Care Business Unit Performance Pharmaceutical

Worldwide sales for the eye care pharmaceutical business were $93.3 million for the first three months of 1997, a 5 percent decrease from 1996 first quarter sales of $98.0 million. Excluding the impact of foreign currency changes, pharmaceutical sales decreased 3 percent or $3.2 million compared to the first quarter of 1996.

During the quarter, continuing weakness in the base business due to generic competition was partially offset by strong initial acceptance of Alphagan(r)(brimonidine) in the U.S. marketplace resulted in prescriptions and sales exceeding the company's expectations. Additionally, Alphagan(r) received marketing clearance in the United Kingdom and Brazil for the treatment of open-angle glaucoma and ocular hypertension. In the United States and Brazil, the product has received additional marketing approval for the prevention of post operative intraocular pressure elevations in patients undergoing argon laser trabeculoplasty. Allergan will seek approval to market Alphagan(r) in the balance of the European community through the mutual recognition filing process.

In March, Pacific Pharma L.P., Allergan's wholly owned company, introduced timolol maleate 0.25% and 0.5%, a generic version of Timoptic(r). The generic product is being marketed and distributed by Schein Pharmaceutical, Inc. in the United States.

Surgical

Sales for the ophthalmic surgical business were $40.3 million during the first quarter of 1997, essentially flat compared to the first quarter of 1996. Excluding the impact of foreign currency changes, surgical sales increased 3 percent or $1.3 million over the first quarter of 1996. The UnFolder(tm), a device for inserting foldable IOLs (intraocular lenses), has been introduced in the U.S. marketplace and should enhance IOL unit growth.

In August 1996, Allergan submitted a Pre Market Approval application to the FDA for the AMO(r)Array(r), a multifunctional IOL used in small-incision cataract surgery. The submission is under active review, and the company is expecting it to be reviewed at the July FDA Ophthalmic Advisory Panel meeting.

Optical

Sales for the optical contact lens care business were $89.4 million for the first quarter of 1997, a decrease of 2 percent from first quarter 1996 sales of $91.5 million. Excluding the impact of foreign currency changes, optical sales increased 2 percent or $2.0 million over the first quarter of 1996.

Complete(r) brand and Consept F(r) contact lens solutions sales continue to grow in the U.S. and Japan markets, respectively. Optical sales in Europe continue to be negatively impacted by new private label competition and the market shift from traditional hydrogen peroxide disinfection systems to more convenient and lower priced one-bottle disinfection systems.

Skin Care Business Unit

Sales for Allergan skin care products were $13.5 million during the first quarter of 1997, a decrease of 2 percent from the $13.8 million in sales recorded during the same period last year. Sales of Herald products continue to grow offset by reduced demand for other off-patent skin care products. In March, M.D. Forte(r) Total Daily Protector, a physician-dispensed innovative combination sunscreen product that offers protection against premature aging of the skin due to sun exposure, received marketing approval in the United States.

In February 1997, Zorac(r)(tazarotene) was launched in Germany. Approval to market Zorac(r) in the balance of the European community through the mutual recognition filing process is underway. In February 1997, Zorac(r) also received marketing approval in Canada for the treatment of psoriasis and acne. To date, applications for marketing approval also have been submitted in Argentina, Australia, Brazil, Chile, Mexico, New Zealand, Peru and South Africa.

The New Drug Approval application for Tazorac(tm), the name under which the product will be marketed in the United States, for the treatment of psoriasis and acne was accepted by the FDA in July 1995. An approvable letter for both indications was received in December 1996. Allergan's response to the approvable letter, including data relevant to resolving specific points in the labeling, was accepted by the FDA in January 1997 and a User Fee action date in July 1997 was assigned.

Botox/Neuromuscular Business Unit

Sales for Botox(r)(Botulinum Toxin Type A) purified neurotoxin complex were $19.7 million during the first quarter of 1997. This represents an increase of 38 percent over the $14.3 million in sales during the first quarter of 1996. Excluding the impact of foreign currency changes, Botox(r) sales increased 39 percent or $5.6 million over the first quarter of 1996. In April 1997, Botox(r) was launched in Japan for the treatment of blepharospasm.

Stock Repurchase Program Activated

In March 1997, the company activated its Stock Repurchase Program. Under the terms of a stock repurchase plan previously approved by the Board of Directors in 1993, Allergan is authorized to make repurchases from time to time, at the discretion of management, in the open market or through privately negotiated transactions. Repurchased common shares are added to Allergan's treasury shares and used to meet common stock requirements for employee benefit plans. The existing Board approval allows repurchase of approximately 2.8 million shares at this time. On March 28, 1997, the company had 65,530,029 shares outstanding. The Board may be asked to approve a larger program.

Additional Financial Highlights

The gross profit margin was 63.9 percent in the first quarter of 1997 compared to 66.8 percent for the same period last year. The gross margin percentage decline in the first quarter of 1997 compared to the same period in 1996 was due primarily to foreign currency changes, continued generic intrusion, managed care rebates, as well as global competitive pricing pressures. As a result of the strategic restructuring announced in 1996, the Phoenix and Irwindale manufacturing facilities have been closed. However, the favorable impact on the gross profit margin will not be fully realized until 1998.

Selling, general and administrative (SG&A) expenses were $113.0 million during the first quarter of 1997, a decrease of $1.3 million from the same period last year. Research and development expenses were $27.6 million during the first quarter of 1997, an increase of 3 percent compared to first quarter of 1996. Reported R&D spending in the first quarter of 1996 and 1997 does not include R&D spending for ALRT. On April 8, Allergan hosted a Technology Conference to give the investment community a view of the depth and breadth of the Company's R&D pipeline. Allergan issued a press release summarizing presentations at this Technology Conference.

Any of the above statements that refer to the company's estimated or anticipated future results are forward-looking and reflect the company's current analysis of existing trends and information. Actual results may differ from current expectations based on a number of factors affecting Allergan's businesses, including competitive conditions and changing market conditions, the timing and uncertainty of results of both research and regulatory processes and performance, including consumer acceptance of new products, realization of the favorable gross profit margin impact expected from the company's previously announced strategic restructuring, and the results of geographic expansion efforts. In addition, matters generally affecting the economy, such as currency exchange rates and the state of the economy worldwide, can affect the company's results. These forward-looking statements represent the company's judgment only as of the date of this press release. Actual results could differ materially from those projected in this release. As a result, the reader is cautioned not to rely on these forward-looking statements. The company disclaims, however, any intent or obligation to update these forward-looking statements.

Additional information concerning these factors can be found in press releases as well as in the company's public periodic filings with the Securities and Exchange Commission, including the discussion under the heading "Certain Factors and Trends Affecting Business" in the company's 1996 Form 10-K. These filings are available publicly and upon request from Allergan's Investor Relations Department: 714-246-4636 or http://www.allergan.com .

Allergan, Inc., headquartered in Irvine, California, is a technology-driven, global health care company, focused on specialty pharmaceutical products for specific disease areas that deliver value to customers, satisfy unmet medical needs and improve patients' lives.

The following tables represent condensed consolidated statements of income, condensed consolidated balance sheets, and a statement of net sales by division. more, more the United States. -0-

                         ALLERGAN, INC.
           Condensed Consolidated Statements of Income

                                       Three Months
in millions, except per share             Ended
                                 March 28,      March 31,   pct Inc
                                   1997           1996       (Dec)

Net Sales                         $256.2          $258.1    (0.7)pct
 Costs and
  expenses
 Cost of sales                      92.6            85.7
 Selling,
  general and
  administrative                   113.0           114.3
 Research and
  development                       27.6            26.8
 Operating Income                   23.0            31.3   (26.5)pct
    Interest income                  1.8             2.3
    Interest expense                (2.2)           (3.3)
    Other, net                       2.4             2.2
 Interest and other, net             2.0             1.2
Total costs and expenses           231.2           225.6
Earnings before income taxes and
  minority interest                 25.0            32.5
Provision for income taxes           7.3             9.4
Minority interest                   (0.1)              -
Net Earnings                      $ 17.8          $ 23.1   (22.9)pct
Net earnings per common
  share                          $  0.27         $  0.35   (22.9)pct
Weighted average number of
  common shares outstanding         66.1            65.6
-0-
                         ALLERGAN, INC.
            Condensed Consolidated Balance Sheets

in millions                         March 28,    December 31,
                                      1997           1996

Assets
Cash and equivalents                  $117.6         $112.0
Trade receivables, net                 222.3          242.5
Inventories                            134.2          130.1
Other current assets                   119.0          115.1

Total current assets                   593.1          599.7

Property, plant and equipment,
  net                                  340.6          348.5
Other noncurrent assets                393.4          401.6

Total assets                        $1,327.1       $1,349.8

Liabilities and stockholders' equity

Notes payable                         $ 83.9         $ 66.6
Accounts payable                        68.3           75.4
Accrued expenses and income taxes      208.6          233.3

Total current liabilities              360.8          375.3

Long-term debt                         165.0          170.0
Other liabilities                       51.5           54.7
Stockholders' equity                   749.8          749.8

Total liabilities and
  stockholders' equity              $1,327.1       $1,349.8
-0-
                         ALLERGAN, INC.
                      Net Sales by Division

                                       Three Months
in millions                               Ended
                                 March 28,      March 31,
                                   1997           1996

Pharmaceuticals                   $ 93.3         $ 98.0
Surgical                            40.3           40.5
Optical Lens Care                   89.4           91.5
   Total Eye Care                  223.0          230.0
Skin Care                           13.5           13.8
Botox                               19.7           14.3
TOTAL NET SALES                   $256.2         $258.1


Domestic                             42%            42%
International                        58%            58%

CONTACT: Jeff D'Eliscu

714/246-4636