Biotech Values

[DewDiligence]

AGN Reports 4Q10 Results

[Although jessellivermore probably disagrees, AGN is a fine play on the growing interest in aesthetic medicine, which is part and parcel of The Global Demographic Tailwind. I.e., people in the emerging middle classes around the world are willing to spend more and more money on products to look younger and better, which implies a bright future for such products as Botox, breast implants, dermal filers, and Latisse. Moreover, AGN’s LapBand is the leading product worldwide for the treatment of obesity.

Based on the 2011 non-GAAP EPS guidance $3.54-3.60, AGN currently trades at a forward P/E of about 20x. This might seem expensive on a cursory inspection, but it is reasonable in comparison to AGN’s prospects, IMO.

AGN has often been rumored to be a buyout candidate for a Big Pharma, and at some point I expect that it will actually happen. The trigger for AGN to be willing to sell might be AGN’s becoming concerned about competition from JNJ’s botulinum toxin called PurTox, which JNJ picked up in its 2008 acquisition of Mentor (#msg-33879830).]

http://finance.yahoo.com/news/Allergan-Reports-Fourth-bw-3543002295.html?x=0&.v=1

›February 2, 2011, 9:00 am EST

IRVINE, Calif.--(BUSINESS WIRE)-- Allergan, Inc. (NYSE:AGN) today announced operating results for the quarter ended December 31, 2010. Allergan also announced that its Board of Directors has declared a fourth quarter dividend of $0.05 per share, payable on March 11, 2011 to stockholders of record on February 18, 2011.

Operating Results Attributable to Stockholders

For the quarter ended December 31, 2010:

• Allergan reported $0.85 diluted earnings per share attributable to stockholders compared to $0.72 diluted earnings per share attributable to stockholders for the fourth quarter of 2009.

• Allergan reported $0.88 non-GAAP diluted earnings per share attributable to stockholders compared to $0.78 non-GAAP diluted earnings per share attributable to stockholders for the fourth quarter of 2009, a 12.8 percent increase.

Product Sales

For the quarter ended December 31, 2010:

• Allergan reported $1,290.1 million total product net sales. Total product net sales increased 6.9 percent compared to total product net sales in the fourth quarter of 2009. On a constant currency basis, total product net sales increased 7.4 percent compared to total product net sales in the fourth quarter of 2009.

o Total specialty pharmaceuticals net sales increased 6.9 percent, or 7.3 percent on a constant currency basis, compared to total specialty pharmaceuticals net sales in the fourth quarter of 2009.

o Total medical devices net sales increased 7.1 percent, or 7.9 percent on a constant currency basis, compared to total medical devices net sales in the fourth quarter of 2009.

“We are very pleased with our fourth quarter and full year results, as well as the record number of regulatory approvals secured in 2010,” said David E.I. Pyott, Allergan’s Chairman of the Board and Chief Executive Officer. “In 2011, we look forward to marketing the new products and therapies approved in 2010, as well as investing in R&D to reload our pipeline.”

Based on internal information and assumptions, full year 2010 therapeutic sales accounted for approximately 51% of total BOTOX® (onabotulinumtoxinA) sales and increased approximately 6% compared to 2009. Full year 2010 cosmetic sales accounted for approximately 49% of total BOTOX® sales and increased approximately 11% compared to 2009.

Product and Pipeline Update

During the fourth quarter of 2010:

• On October 15, 2010, Allergan announced that the United States Food and Drug Administration (FDA) approved BOTOX® (onabotulinumtoxinA) for the prophylactic treatment of headaches in adults with chronic migraine, a distinct and severe neurological disorder characterized by patients who have a history of migraine and suffer from headaches on 15 or more days per month with headaches lasting four hours a day or longer.

• Allergan filed a supplemental Biologics License Application (sBLA) with the FDA for the use of BOTOX® in the treatment of urinary incontinence due to neurogenic detrusor overactivity resulting from neurogenic bladder.

• On December 3, 2010, Allergan announced that the FDA Gastroenterology and Urology Devices Panel of the Medical Devices Advisory Committee recommended with an 8-2 vote that the FDA extend the currently approved use of the LAP-BAND® System, Allergan’s gastric band, on the basis of a favorable benefit-risk profile for weight reduction in obese adults who have failed more conservative weight reduction alternatives and have a Body Mass Index (BMI) of at least 35 or a BMI greater than 30 and at least one comorbid condition.

Following the end of the fourth quarter of 2010:

• On January 31, 2011, Allergan and MAP Pharmaceuticals, Inc. announced a collaboration within the United States for LEVADEX™, a self-administered, orally inhaled therapy that has completed Phase III clinical development for the treatment of acute migraine in adults. MAP Pharmaceuticals currently anticipates submitting its New Drug Application for LEVADEX™ with the FDA in the first half of 2011.

Outlook

For the full year of 2011, Allergan expects:

• Total product net sales between $5,020 million and $5,220 million.

o Total specialty pharmaceuticals net sales between $4,160 million and $4,300 million.

o Total medical devices net sales between $860 million and $920 million.

o ALPHAGAN® franchise product net sales between $380 million and $400 million.

o LUMIGAN® franchise product net sales between $550 million and $580 million.

o RESTASIS® product net sales between $680 million and $710 million.

o BOTOX® product net sales between $1,490 million and $1,540 million.

o LATISSE® product net sales at approximately $100 million.

o Breast aesthetics product net sales between $330 million and $350 million.

o Obesity intervention product net sales between $220 million and $240 million.

o Facial aesthetics product net sales between $310 million and $330 million.

• Non-GAAP cost of sales to product net sales ratio at approximately 14.5%.

• Non-GAAP other revenue at approximately $50 million.

• Non-GAAP selling, general and administrative expenses to product net sales ratio between 38% and 39%.

• Non-GAAP research and development expenses to product net sales ratio at approximately 16%.

• Non-GAAP amortization of acquired intangible assets at approximately $20 million. This expectation excludes the amortization of certain acquired intangible assets associated with business combinations, asset purchases and product licenses.

• Non-GAAP diluted earnings per share attributable to stockholders between $3.54 and $3.60.

• Diluted shares outstanding at approximately 309 million.

• Effective tax rate on non-GAAP earnings at approximately 28%.

For the first quarter of 2011, Allergan expects:

• Total product net sales between $1,170 million and $1,220 million.

• Non-GAAP diluted earnings per share attributable to stockholders between $0.71 and $0.73.‹