Allergan plc’s AGN third quarter 2015 earnings came in at $3.48 per share, well above the Zacks Consensus Estimate of $3.20 per share and 65% above the year-ago period.
Revenues for the reported quarter came in at $4.089 billion, up 90% from the year-ago period, but just shy of the Zacks Consensus Estimate of $4.092 billion.
Quarterly Details
Allergan is treating its Global Generics business as discontinued operations from the third quarter following its agreement to divest the business to Teva Pharmaceutical Industries Ltd. TEVA. Allergan is now reporting results from the U.S. Brands, U.S. Medical, International Brands and Anda distribution segments.
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). Products like Botox and Restasis brought in sales of $605 million and $328 million, respectively, with Botox seeing strong growth in both the aesthetic and therapeutic settings and Restasis benefiting from promotional efforts.
While Namenda IR sales plunged 82.1% to $54.9 million, Namenda XR sales came in at $214.5 million. The company started facing generic competition for Namenda IR from July.
U.S. Brands revenues shot up 50% to $2.4 billion in the third quarter of 2015 with growth being driven by Allergan legacy products like Botox, Restasis, Lumigan/Ganfort, and Combigan, strong growth from Namenda XR, Linzess, Viibryd/Fetzima, LoLoestrin, Estrace Cream, Minastrin and Bystolic.
While U.S. Medical Aesthetics revenues came in at $457 million, International Brands revenues were $661 million in the reported quarter compared to $58 million in the year-ago quarter. Growth was driven by Allergan products like Botox, Juvederm, Ganfort, Combigan, and Ozurdex.
Anda revenues increased 15% during the quarter to $576 million driven by new launches and volume growth.
Allergan said that it will not be providing guidance considering the preliminary friendly discussions regarding a potential business combination transaction with Pfizer, Inc. PFE.
Our Take
Allergan’s third quarter results were strong with the company surpassing earnings estimates and revenues shooting up from the year-ago period. We are positive on the Forest acquisition which is in line with Allergan’s strategy of building its branded product portfolio.
Meanwhile, the Durata acquisition has boosted Allergan’s infectious disease portfolio. The Allergan Inc. acquisition also looks good to us. We are encouraged by Allergan’s focus on building its branded and biosimilars pipeline and the decision to divest the generics business should allow the company to focus on its target areas.
Investor focus will remain on the possibility of a business combination with Pfizer. Allergan will also be providing an update on its pipeline. Meanwhile, along with reporting third quarter results, the company announced a licensing agreement for the treatment of dry eye disease and an acquisition agreement which will add earFold, a medical device for the correction of prominent ears, to its portfolio.
Allergan is a Zacks Rank #4 (Sell) stock. Mylan NV MYL is a better-ranked stock with a Zacks Rank #1 (Strong Buy).
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