Allergan's second-quarter revenue misses estimates, posts wider loss

Allergan announced Monday that second-quarter sales rose 1.5 percent year-over-year to $3.7 billion, with the company noting that a "strong performance" for key brands and new product launches offset the loss of exclusivity on Namenda IR. However, the sales figure missed analyst expectations of up to $4.1 billion, while Allergan posted a loss in the three-month period of $571.3 million, widened from a loss of $312.7 million in the same quarter of 2015, with much of the increase due to the impact of discontinued operations.

CEO Brent Saunders said "Allergan delivered another quarter of strong operating performance, while taking important steps to advance our evolution as a focused growth pharma leader," adding that "2016 has been a year of significant positive transition"for the company. Earlier this month, Allergan completed the sale of its global generics unit to Teva for $40.5 billion following the US Federal Trade Commission's delayed approval of the transaction. Allergan also recently agreed to divest its Anda distribution business to the Israeli drugmaker for $500 million. "These steps position Allergan as a pure branded focused business able to maximise the power of its therapeutic areas and the promise of its…pipeline of 65-plus, mid- to late-stage development programmes," Saunders said.

The CEO suggested Allergan plans to use some of the proceeds from the generics deal with Teva to reimburse debt and buy back shares. The company, which has said it would seek smaller acquisitions after its planned $160-billion merger with Pfizer fell through in April amid changes to US tax-inversion rules, was also named in recent speculation as having held informal preliminary talks about a potential acquisition of Biogen. For related analysis, see ViewPoints: Biogen – the hard sell

With regard to quarterly results, Allergan said it generated $1.5 billion in US revenue for specialised therapeutics, compared with about $1.3 billion in the year-ago period, while sales of general medicines in the country fell from roughly $1.6 billion in the second quarter of 2015 to $1.4 billion. International sales reached $757 million, versus $717.1 million in the year-ago quarter. 

Quarterly revenue for Botox rose 14 percent to $719.7 million, besting projections of $699.5 million. The company noted that in the US, Botox sales were bolstered by continued growth in migraine and overactive bladder, while internationally, results were driven by "strong" performance in migraine and share expansion in key markets. Meanwhile, revenue from Restasis jumped 20.2 percent to $390.6 million, ahead of forecasts of $346 million. Sales of Namenda XR were down 18.7 percent to $166.5 million "as a result of lower net selling price and volume," while Namenda IR plunged 98.2 percent to $4.1 million. 

For the full year, Allergan anticipates per-share earnings of between $13.75 and $14.20 on revenue in the range of $14.65 billion to $14.9 billion. Analysts anticipate earnings of $13.94 per share to $14.21 per share on sales forecasts ranging from $16.2 billion to $16.6 billion.

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