Allergan beats revenue forecasts on higher US brand sales

Irish-based drug company Allergan reported better-than-expected quarterly revenue, helped by strong performance in its US brands segment, and said it continues to expect its takeover by Pfizer to close in the second half 2016.

Allergan said revenue in its US brands business rose 38 per cent to about $2.5 billion in the quarter to end-December last, accounting for 58.7 per cent of total revenue.

Botox global sales were about $460 million, while Restasis global sales came in at about $348.2 million.

Pfizer agreed in November to buy Allergan in a $160 billion deal which is meant to slash Pfizer’s tax rate as it would shift its headquarters to Dublin. The deal has been under intense regulatory scrutiny with politicians condemning it as a tax-dodge.

Talking about speculation around the takeover, chief executive Brent Saunders said he saw no obstacles with the closing of the deal.

“(The deal) was constructed in a highly legal way with advice of many experts and I think we’re in a very strong position to close this deal in the second half of the year.”

Allergan forecast 2016 adjusted revenue of about $17 billion, just shy of the analysts’ average estimate of $17.66 billion. This estimate takes into account foreign exchange impact of $200 million and a $500 million decline in the company’s low-margin generics business.

RBC Capital Markets analysts said the 2016 forecast was largely in line with the Street’s expectations. “But importantly, it implies 10 per cent-plus growth in the core branded revenue which is solid,” they wrote.

Allergan’s net loss narrowed to $700.5 million, or $1.78 per share, in the fourth quarter, from $732.9 million, or $3.34 per share, a year earlier.

GAAP results were impacted by acquisition-related expenses, the company said.

Excluding special items, Allergan earned $3.41 per share, while analysts were expecting a profit of $3.34 per share.

Revenue rose about 74 per cent to $4.2 billion in the quarter, beating analysts’ average estimate of $4.19 billion. – Reuters