Allergan Posts Loss Despite Botox Sales
Allergan Inc. said Wednesday that acquisition-related expenses led to a second-quarter loss despite strong sales of its injectable wrinkle treatment Botox and other pharmaceutical products.
The Irvine-based company said it lost $107.9 million, or 83 cents a share, in contrast to a profit of $3.8 million, or 3 cents, in the year-earlier quarter. Excluding charges related to its acquisition of Bardeen Sciences Co. and other items, Allergan earned $70.2 million, or 53 cents a share, beating Wall Street analysts’ estimate of 52 cents, according to Thomson First Call.
“The results looked very strong,” analyst Timothy D. Coan of US Bancorp Piper Jaffray said in a research note.
Revenue rose 30% to $441.5 million. Botox sales were $143.1 million, up 27.5% from the year-earlier quarter and ahead of analysts’ projections.
“They just blew away expectations,” said Corey Davis of J.P. Morgan. “Evidently, people are willing to pay a lot to be beautiful.”
The wholesale cost of a vial of Botox is $419.
A form of a deadly poison called botulinum toxin, Botox became a favorite of cosmetologists in the war on wrinkles after it received regulatory approval for that use 16 months ago. It has been used for two decades to treat rare muscle disorders.
In response to questions from analysts, Chief Executive David Pyott dismissed any threat to Botox from a much-anticipated injectable gel called Restalyne. The gel from rival Medicis Pharmaceutical Corp. is expected to receive Food and Drug Administration approval next year.
Pyott described the gel as a complementary product and likened cosmetic treatments to a home remodeling. “Once you do the living room, you move on to do the whole house,” he said during a conference call with analysts. “People who start with Botox will be tempted to move on and do more.”
Analyst David Maris of Banc of America Securities said physicians would be motivated to sell patients both treatments for different types of wrinkles. “We do not believe it will steal sales from Botox,” he said.
Allergan said sales of its Alphagan glaucoma treatments weren’t hurt in the quarter by generic competition, and it raised its sales estimates for those drugs by $30 million for the year.
Allergan announced its results before the market close. Its stock rose $1.79 to $79.55 on the New York Stock Exchange.
