Biotech Values

[DewDiligence]

AGN – 4Q08 breast implants sales of $71M showed the biggest decline (-12%), probably due to the economic downturn… AGN to lay off 460 employees, or 5% of workforce.

AGN’s share price is slightly up today. The 5% layoff is exactly what the doctor ordered insofar as AGN had among the highest ratios of SG&A to sales in the pharma industry. This was beneficial when sales were growing at a steady clip but, in the current economy, the high SG&A was simply a drag on EPS.

As I’ve said many times on this board, breast implants are the least exciting of the various businesses AGN is in, so it’s not a big deal that implant sales are sagging in a soft economy.

2009 sales guidance for Latisse: 30-$50M.

AGN has a history of giving very conservative guidance and then beating the guidance handily. I think Latisse will do more than $50M this year, despite the discretionary nature of the product, and will garner peak sales of more than $500M (when the economy eventually improves).