Allergan Third-Quarter Profit Tops Estimates as Sales Climbby
Revenue from top drugs Botox, Namenda is short of estimates
Company doesn't expand on previous comments on Pfizer deal
Allergan Plc, Pfizer Inc.’s target in a deal that could be the largest health-care acquisition of all time, reported third-quarter earnings that topped analysts’ estimates as the company’s recent takeovers added to revenue.
Third-quarter profit excluding one-time items was $3.48 a share, topping estimates for $3.18 a share. Sales rose 90 percent to $4.09 billion, thanks to a series of deals by the company. On average, analysts had expected $4.03 billion.
Allergan is in talks to be bought by Pfizer and intends to reach an agreement by Thanksgiving, according to people familiar with the situation. The company has called those talks friendly. The company, which has a legal address in Ireland and operations in the U.S., could provide tax relief for Pfizer, along with a portfolio of brand-name treatments.
Allergan has made a series of deals to grow from a small generic drugs company a few years ago into one of the pharmaceutical industry’s biggest players. The largest of those deals was last year’s about $66 billion purchase of Allergan Inc., which gave the company, then called Actavis, blockbuster products like the anti-wrinkle treatment Botox.
Third-quarter sales of the Allergan’s top drugs didn’t live up to analyst expectations. Botox generated $604.5 million in quarterly sales, below estimates of $621.2 million. Dry-eye drug Restasis brought in $328.3 million, short of estimates of $337.8 million. Sales of the company’s third-biggest drug, Namenda, which treats Alzheimer’s disease, totaled $269.4 million, less than analyst estimates of $328.8 million.
After announcing the $40.5 billion sale of its generics business to Teva Pharmaceutical Industries Ltd. in July, Allergan is more reliant than ever on brand-name drugs that come with higher margins than generics but also limited periods of exclusive sales rights. The company’s pipeline will be discussed in more detail during a research and development event on Wednesday.