The company took $2.5 million in pretax charges in connection with activities related to discontinued products.
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The impressive growth in the company’s earnings has largely come on the back of significant accretions from Allergan’s largest deal of the year, the acquisition of the famous Botox maker, Allergan by Actavis, the former name of this drug maker.
Last week, Allergan Plc, a drugmaker known for its best-seller Botox, said it is in the beginning stages of talks to merge with pharmaceutical giant Pfizer Inc. Allergan will also be providing an update on its pipeline.
TheStreet’s Jim Cramer, Portfolio Manager of the Action Alerts PLUS Charitable Trust Portfolio, commented on Allergan earnings in ‘Allergan Delivers a Healthy Third Quarter’ saying: “We are certainly not surprised that Brent Saunders and his team delivered another exceptional quarter with widespread growth across product areas”. Botox sales grew about 7.9% from a year earlier, or 13% on a currency-adjusted basis, Chief Financial Officer Maria Teresa Hilado said on a call with analysts, according to a FactSet transcript.
Branded product revenues soared to $3.5 billion (up significantly from $1.7 billion in the year-ago period), driven by the Allergan, Inc. and Forest acquisitions and the performance of products like Lo Loestrin ($90.8 million) and Estrace Cream ($87.4 million). The results include amortization and acquisition-related expenses, including license agreements, impairments, and severance associated with acquired businesses.
Revenues Fall Short: Allergan posted revenues of $4.088 billion, just shy of consensus estimates of $4.092 billion. Earnings jumped 65% to $3.48 a share, beating consensus by 30 cents. The deal, worth a massive $66 billion, concluded in March this year and is expected to result in double-digit accretion to be realized by the second half of next year. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings of $3.20 per share.
Analysts at Bernstein noted that Allergan was a good fit for Pfizer.
A merger of this magnitude would increase Pfizer’s revenue while lowering its corporate tax rate. Allergan stock touched a record high above 340 on July 29. This summer, Allergan snatched up Kythera Biopharmaceuticals Inc., the maker of a double-chin-blasting injection, for $2.1 billion, and it recently agreed to sell its generics unit to Teva for $40.5 billion in a move to focus on branded drugs.
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Shares in the company, up 21% this year, slipped 1.6% in midday trading.
