Hefty charges on Allergan’s third-quarter books dragged heavily on its overall performance, pushing finances into the red despite respectable growth in product sales for the period.
The group booked a loss of $671 million for the third quarter compared with a profit of $179 million a year earlier, though its swing into the negative was largely in line with general expectations and masked significant progress elsewhere.
Loss was driven by Allergan’s $600-million settlement fee - agreed in September - to lay to rest an investigation by the US Department of Justice into marketing practices for certain uses of its wrinkle fix Botox (botulinum toxin type A), including headache, pain, spasticity and juvenile cerebral palsy, which were not approved by regulators at the time.
And this hit was further magnified by a third-quarter charge of $369 million relating to the impairment of assets relating to Sanctura, which it acquired in connection with the October 2007 buy of Esprit Pharma, the firm said.
On the plus side, total pharmaceutical sales grew 5.2% to $989 million and included solid turnover of Botox, which grew 4% at $342 million and looks set for further success following additional regulatory approvals on both sides of the pond, while revenue from medical devices jumped 8.3% to $203 million.
And the strong sales during the period, which reportedly came in at the top end of estimates, have prompted the firm to increase its earnings forecast for the full year to between $3.14 and $3.16 per share, from prior expectations of $3.11 to $3.15 per share.
The group has also forecast 2010 pharmaceutical revenues of $3.95 billion-$3.97 billion, with upper-end estimates for sales of Botox $1.4 billion and eye products Lumigan (bimatoprost) and Restasis (cyclosporine ophthalmic emulsion) $530 million and $610 million, respectively.
David Pyott, Allergan's board chairman and chief executive said Allergan is “very pleased” with the results, and he noted that strong R&D performance “led to a series of several important product approvals, including FDA approval of Lumigan 0.01%, Ozurdex for uveitis, and Botox for the prophylactic treatment of headaches in adults with chronic migraine, as well as approvals in Europe and Canada,” during the period.