Allergan's Q3 sales rise 4.4 percent; $10-billion share buyback launched

Allergan announced Wednesday that third-quarter net income reached $15.2 billion, versus $5.2 billion in the year-ago period, as sales rose 4.4 percent to $3.6 billion, although the figure missed analyst forecasts of $3.7 billion. The company noted that revenue was driven by the "strong" performance of key brands and new product launches, offset by the loss of exclusivity on Asacol HD and lower sales of Namenda.

CEO Brent Saunders remarked "our top global products powered our performance in the third quarter, including Botox, Restasis [and] Linzess/Constella." The executive continued "we are focused on finishing 2016 with strong momentum," adding "we are well positioned to leverage our growth pharma strategy."

Regarding individual products, revenue from Botox jumped 14.1 percent year-over-year to $689.7 million. Meanwhile, Allergan recorded sales of $371.8 million for Restasis, up 13.3 percent versus the year-ago quarter, while revenue from Linzess/Constella jumped 42.2 percent to $168.7 million. Conversely, sales of Asacol declined 45 percent to $86.4 million, with revenue from Namenda XR slipping 31.5 percent to $146.9 million and sales of Namenda IR plunging 94.7 percent to $2.9 million.

For the full year, Allergan indicated that it now expects sales of between $14.45 billion and $14.65 billion, cut from prior guidance of $14.65 billion to $14.9 billion. Meanwhile, annual earnings per share are now predicted to be in the range of $13.30 to $13.50, lowered from an earlier forecast of $13.75 to $14.20. Analysts estimate annual sales of around $14.7 billion on earnings per share of $13.91.

The company also on Wednesday unveiled a $10-billion accelerated share repurchase scheme, as well as the initiation of cash dividend starting in 2017. Under the programme, which follows the completion of the repurchase of $5 billion worth of company stock under a previously announced initiative, Allergan aims to buy back and retire about $8 billion in shares this month, with the remaining shares being repurchased by the end of the third quarter of next year. 

"We continue to believe there is no greater investment than Allergan stock, given our powerful growth prospects," Saunders explained. The executive added "we believe that these bold actions strike the right balance in our desire to return significant capital to our shareholders while maintaining our investment-grade credit ratings and preserving significant firepower to invest for growth." 

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