Allergan Sells Contact-Lens Manufacturer : Streamlining: Deal is part of company’s strategy to trim its operations and drop unprofitable subsidiaries and product lines. Terms of the pact were not announced.

Allergan Inc. said Tuesday that it has agreed to sell its contact-lens business in North and South America to a San Francisco firm, saying that profits from the 5-year-old venture have been disappointing.

Ocular Sciences Inc., a contact-lens manufacturer, has signed the agreement to take over Allergan’s four contact-lens production facilities. One facility is in Toronto and three more are in Santa Isabel, Puerto Rico. The sale is expected to be completed in midsummer, company officials said.

No layoffs are expected, and terms of the sale were not disclosed.

Allergan’s decision to halt manufacture and sales of contact lenses in the Western Hemisphere is part of an overall streamlining of the company, which continues to strip itself of unprofitable subsidiaries and product lines, Board Chairman Gavin S. Herbert said.

“(Last year) was really a challenging year for Allergan and one of the most important years for the company,” Herbert told stockholders at the company’s annual meeting, which was held at the Irvine Marriott hotel.

Indeed, selling nearly a third of its $77.6-million-a-year contact-lens business comes six months after the sale of Allergan Humphrey, the company’s diagnostic-instrument subsidiary, for $1 million, according to the company’s annual financial report.

Since last October, when the company announced plans to scale back on its contact-lens business, Allergan has been looking into more profitable enterprises and investments, company officials said.

Chief executive William C. Shepherd declined to comment on future acquisitions, joint ventures or partnerships that may be under consideration. Its other product lines include skin- and eye-care pharmaceutical products and ophthalmic surgical devices.

Allergan has had a strong first quarter. The company posted profits of $20.1 million, equal to 30 cents per share, for the three months ended March 31. That is up 28% from the same period in 1991. First-quarter sales increased 7.1% to $210 million.

Allergan stock closed Tuesday at $22, up 25 cents on the New York Stock Exchange.

Much of the revenue increase was attributed to worldwide sales of its skin- and eye-care pharmaceutical products, which accounted for $91 million in the first quarter, and sales of its ophthalmic surgical devices, which accounted for $26.1 million.

In an interview after the annual meeting, Shepherd said Allergan will concentrate more on those areas, as it continues to manufacture and sell contact lenses overseas.

International sales account for about 70% of the company’s total contact-lens sales.

In the United States, with the introduction of disposable lens in the late ‘80s, negative reports about contact-lens safety and a general acceptance of eyeglasses, domestic sales have been lackluster.

“It’s not as profitable as it once was,” Shepherd said. “We’re not going to invest (any longer) in this business.”

Allergan, once owned by Smith-Klein Beacham, entered the contact-lens business in 1987, with high expectations of gaining a significant foothold in the marketplace.

“It seemed like the right thing to do at the time,” said Allergan spokesman Jeff D’Eliscu.

But it instead faced a tough, competitive U.S. market, managing only to rank sixth in contact-lens sales, D’Eliscu said.

Rather than investing up to $100 million in new equipment to produce the cheaper, more convenient disposable lenses, D’Eliscu said the company decided to get out of the U.S. market.

“We can’t continue to play catch-up with the larger companies” such as Bausch & Lomb Inc. and Johnson & Johnson, D’Eliscu said.

Also at the annual meeting, stockholders by a 91% majority defeated a proposal to cut Allergan’s ties with South Africa.

“The company realizes that it can play only a limited role in the transformation that must take place in South Africa,” the company wrote in its proxy statement to shareholders.

“However, it is the company’s considered opinion that, at this time, the company should remain in South Africa and continue support of initiatives to improve employment, education, housing and health-care conditions for blacks,” the statement continued.