Allergan swings to Q4 loss on impairment charges, as annual sales guidance falls short

Headline results for the fourth quarter:


$4.1 billion (forecasts of $4 billion)



$4.3 billion

Versus a profit of $3.1 billion

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"Allergan posted another quarter of strong results to close out 2018," commented CEO Brent Saunders, adding that products including Botox, Vraylar, Juvéderm and Linzess "added nearly $1 billion in new revenue to our core business in 2018."

The company noted that it recorded impairment charges of $5.4 billion in the fourth quarter, including $1.6 billion for Kybella/Belkyra "as sales forecasts have declined."

Meanwhile, Allergan also disclosed that it is no longer seeking to offload its women's health business. "For women's health, we have concluded that the highest value proposition for this business at this time is to continue managing it and optimising it," Saunders commented.

Other results:

  • US specialised therapeutics sales: $1.8 billion, down 3.9 percent
  • US general medicine: $1.4 billion, down 8.4 percent
  • Medical aesthetics sales: $738.3 million, up 3.6 percent
  • Botox: $945.9 million, up 9.4 percent
  • Restasis: $341.6 million, down 17.7 percent
  • Juvéderm collection: $332.4 million, up 13 percent
  • Linzess/Constella: $211.6 million, up 5.5 percent
  • Bystolic/Byvalson: $152.1 million, down 3.8 percent
  • Vraylar: $150.5 million, up 71.6 percent
  • Full-year sales: $15.8 billion, down 1 percent
  • Full-year loss: $5.1 billion, versus loss of $4.1 billion

What analysts said:

Concerning Allergan's impairment charges, Credit Suisse analyst Vamil Divan said "given questions around the past deals and management's ability to execute, we think [investors] will likely view this large write-off negatively."

Meanwhile, Real Money analyst Bruce Kamich commented that Allergan "has been in a downtrend from the middle of 2015, and I do not yet find enough technical evidence that is has ended." He suggested the company "could rally in the next few months, but that may not be enough to reverse the longer-term decline."

Looking ahead:

Allergan said it expects annual sales this year of between $15 billion and $15.3 billion, below analyst projections of $15.4 billion. The company forecasts earnings of at least $16.36 per share, with analysts predicting earnings of $16.34 per share.

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