Allergan Reports Post-Purchase Losses

Allergan Inc. reported Wednesday a fourth-quarter loss due to acquisition-related expenses and other charges amid signs that the pace of Botox sales is slowing this year.

The Irvine-based drug company lost $90.8 million, or 70 cents a share, in the fourth quarter, in contrast to net income of $64.4 million, or 49 cents, in the year-ago quarter.

Excluding a $179-million charge related to the acquisition of Oculex Pharmaceuticals Inc. and other expenses, net income was $88.2 million, or 67 cents a share, compared with $71.5 million, or 54 cents, in the fourth quarter of 2002. Oculex is testing a treatment for macular edema, a swelling of the retina associated with diabetes.

The results matched Wall Street’s forecast, according to a survey of analysts by Thomson First Call.

Revenue in the fourth quarter rose 27% to $479 million from $378 million. Sales of Botox increased 23% in the quarter to $158 million from $128 million. A form of a poison called botulinum toxin, Botox is used to treat wrinkles and muscle disorders.

For the year, Allergan had a loss of $52.5 million, or 40 cents a share, in contrast to net income of $252.3 million, or $1.95, in 2002. Full-year results included charges of $458 million related to the purchase of Oculex and Bardeen Sciences Co.

Revenue in 2003 rose 27% to $1.8 billion. Botox sales increased 28% to $564 million, before the effect of currency fluctuations.

Allergan said cosmetic uses accounted for 40% of Botox sales last year, the same percentage as in 2002. It estimated total Botox sales in 2004 would be between $660 million and $700 million, an increase of 17% to 24%.

Allergan last month announced a 7% increase in the price of Botox to $448 a vial. Also, the company said it expected Food and Drug Administration approval this year to market the injectable drug for hyperhydrosis, or excessive sweating.

Analyst Tim Chiang of Natexis Bleichroder said it was not surprising that the pace of Botox sales would slow. “The sales base is pretty big, given what it used to be,” he said. “As it becomes larger, it is harder to attain the same level of growth.”

Allergan estimated 2004 product sales would range from $1.85 billion to $1.93 billion and adjusted earnings per share would range from $2.72 to $2.75. The company signaled that first-quarter earnings would be lower than Wall Street expected.

Allergan shares fell $1.58 to $83.54 on the New York Stock Exchange. The stock reached a 52-week high on Monday.