Allergan Profit Dips 23% After Spinoff

From Times Wire Services

Wrinkles helped to smooth the fourth quarter for Allergan Inc.

The Irvine pharmaceutical company, probably best-known for its wrinkle-banishing treatment Botox, said Wednesday that its fourth-quarter earnings from continuing operations rose as surging sales of the drug as well as its eye-care products offset declines in its skin-care business.

However, the company said net income fell 23% to $64.4 million, or 49 cents a share, from $84 million, or 62 cents, during the same period in 2001, reflecting the spinoff of its contact lens and eye-surgery business.

Earnings from continuing operations rose to 49 cents a share from 46 cents a year ago. Revenue rose to $378.2 million from $306.7 million in the fourth quarter of 2001.

Excluding one-time charges and gains, Allergan's earnings from continuing operations rose to $71.5 million, or 54 cents a share, compared with $58.8 million, or 44 cents, a year ago.

On that basis, analysts had on average expected the company to make 53 cents a share, according to Thomson First Call.

It was in June that Allergan spun off a business that makes eye-surgery devices and contact lenses, now trading publicly as Advanced Medical Optics Inc. In the fourth quarter of 2001, Allergan had income from the business of $23.2 million, or 16 cents a share. Excluding that income, Allergan's profit rose 5.7% in the fourth quarter of 2002.

Sales of Botox in the fourth quarter rose 45% to $128.2 million from $88.3 million a year ago. Allergan won U.S. regulatory approval in April to market its Botox muscle-spasm medicine to smooth forehead wrinkles. Sales of the injection, a purified form of a deadly poison called botulinum toxin, is Allergan's bestselling product.

Meanwhile, sales of Lumigan, a glaucoma treatment the company launched last year, rose from near nothing to $35 million.

However, sales in the skin-care division fell as increased competition hurt sales of its acne drugs Avelex and Tazorac.

The company said it expects sales in the first quarter of $375 million to $395 million and earnings of 52 cents to 53 cents a share.

Allergan's shares fell 90 cents to $60.98 Wednesday on the New York Stock Exchange.

Advanced Medical Optics expects to report fourth-quarter results Feb. 20.

Bloomberg News contributed to this report.

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