Allergan Reports Loss Because of Settlement
The cost of settling a patent dispute over one of its most promising drugs left Irvine-based Allergan Inc. with a third-quarter loss of $36.8 million, the company announced Thursday. But sales surged 24% based largely on the company’s popular Botox cosmetic treatment for facial wrinkles.
The loss amounted to 28 cents a share, contrasted with a profit of $66.8 million, or 50 cents a share, a year earlier. Sales rose to $350 million from $282.1 million a year earlier.
Sales of Botox, also approved to treat muscle spasms, rose 43% to $110.7 million in the quarter. In April, the Food and Drug Administration approved Botox for relaxing forehead wrinkles. Through the nine months ended Sept. 30, Botox sales totaled $311.5 million, surpassing sales of $310 million for all of 2001.
The company said Thursday that it also would seek FDA approval to expand the use of Botox to include treatment for hyperhidrosis, or uncontrollable sweating.
Allergan said it had reached a “settlement in principle” with rival Pharmacia Corp. and with Columbia University over patent infringement claims in California, Delaware and Europe involving the company’s glaucoma drug Lumigan. It recorded a reserve of $118.7 million in the quarter to cover the expense. Allergan will owe future royalties on the sale of Lumigan, but the settlement -- which Allergan hopes will be signed within the week -- ensures the company’s right to sell Lumigan worldwide.
Allergan Chief Executive David Pyott said the settlement “will enable us to focus our efforts and resources on expanding our eye-care franchise worldwide.”
Credit-rating firm Standard & Poor’s Inc. agreed, saying Thursday that the settlement “removes a significant uncertainty” surrounding Lumigan’s sales prospects. In spite of the dispute, Lumigan sales rose 228.5% during the quarter to $35 million and stand at $88 million for the year to date.
Excluding settlement costs, Allergan’s profit would have been 48 cents a share, which would have beaten analysts’ expectations by 3 cents.
The company’s shares fell $4.25 to $57.40 in New York Stock Exchange trading Thursday.