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11/3/2009
Allergan 3Q Profit Rises 8.3% With Botox Help
Allergan Inc.'s (AGN) third-quarter profit rose 8.3% with help from rising Botox sales and while the company boosted spending on advertising as it readied for an improved economy.
Allergan 3Q Profit Rises 8.3% With Botox Help

The company also announced Thursday that it made U.S. regulatory filings for two new medical uses of Botox.

Makers of aesthetic medical treatments--Allergan's roster includes wrinkle treatments, breast implants and an eyelash-enhancing drug--have been pressured by the economic downturn. But Allergan said its businesses are performing better than it expected when the year began.

The Irvine, Calif., company boosted its full-year outlook while forecasting stronger-than-expected fourth-quarter results.

"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," David E.I. Pyott, Allergan's chairman and chief executive, said in a release.

Highlighting that investment, selling, general and administrative expenses in the third quarter were up 13% from a year ago, or 8% excluding items.

Pyott said on a conference call that advertising spending represented nearly the entire increase, and that "this demonstrates that we continue to strictly control spending across all other areas."

Allergan shares recently traded up 1.8% to $54.53, and are up about 35% on the year.

Pyott announced that Allergan made FDA filings aimed at winning approval to use Botox to treat chronic migraine headaches and upper-limb spasticity. The FDA said in May it wanted to see more information on spasticity, and Allergan had planned to file those details plus the migraine application around the end of the third quarter.

Allergan's third-quarter earnings rose to $179 million, or 58 cents a share, from $165.4 million, or 54 cents, a year earlier. Excluding restructuring and other impacts, profit rose to 70 cents a share from 65 cents.

Analysts surveyed by Thomson Reuters had forecast, on average, earnings of 69 cents in the recent quarter, and Allergan in July projected a range of 67 cents to 69 cents, excluding items.

Product net sales increased 4.2% to $1.13 billion, but grew 7% excluding the impact of foreign currency rates. Analysts had projected sales of $1.08 billion.

Among Allergan's products, Botox sales rose 3%, or 5.8% excluding currency, to $327.8 million. Wells Fargo analyst Larry Biegelsen said that tops Wall Street expectations that Botox sales would decline to $291 million. Allergan's increased guidance includes a new forecast for Botox sales this year of $1.28 billion to $1.29 billion.

Botox "has performed much stronger than we had anticipated," Pyott said on the call.

Though perhaps best known for treating facial creases, Botox is also used for several medical conditions. Along with frown lines, the injectable neurotoxin is approved in the U.S. to treat uncontrollable blinking, crossed eyes, uncontrollable contractions of neck and shoulder muscles and excessive underarm sweating.

Pharmaceutical sales, which include sales of eye-care drugs, rose 7.8% in the recent quarter while medical-device revenue fell 10.6%. The currency impact weighed on both categories.

For the full year, Allergan now sees 2009 earnings, excluding items of $2.75 a share to $2.77 a share and overall product net sales of $4.35 billion to $4.4 billion. The company in July narrowed projections to earnings of $2.71 to $2.75 and product sales of $4.2 billion to $4.3 billion.

Allergan also forecast fourth-quarter income of 75 cents to 77 cents a share on product sales of $1.11 billion to $1.16 billion. Analysts were projecting a 75-cent profit and total revenue of $1.1 billion.


-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com

http://online.wsj.com/article/BT-CO-20091029-71711...

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