Irvine-based Allergan Inc.’s smooth stock cruise had a bit of a bump recently in the wake of its traditional conservative guidance, but its veteran chief executive is not worried.
“I did make a point about how we haven’t changed any of our guidance for the year,” David Pyott said earlier this month (see Pyott’s OC 50 profile in Special Report starting on page 21).
Allergan said May 2 it expects a profit of $322.1 million to $328.2 million in the current quarter. Analysts on average project Allergan to post a second-quarter profit of $334.5 million.
• Headquarters: Irvine
• Business: Drug maker
• Founded: 1948
• Ticker symbol: AGN (NYSE)
• Market value: About $28.2 billion
• Notable: Forecast on second-quarter profits, revenue below analyst average
Allergan forecasts revenue of $1.45 billion to $1.5 billion for the second quarter. That compares with analysts’ consensus estimate of $1.51 billion. Allergan also reaffirmed guidance on full-year financial results.
The company forecasts 12-month profit of $1.28 billion to $1.3 billion on revenue of $5.65 billion to $5.85 billion. Wall Street consensus on May 9 projected Allergan’s 2012 profit at $1.27 billion on revenue of $5.87 billion.
The company’s shares fell as much as 6% on May 2, when Allergan released its first-quarter results, before bouncing back.
Allergan shares are up 6% so far this year, to a market value of $28.3 billion, ranking it as the county’s most valuable public company.
Questions about the potential effects of foreign exchange rates or “other factors in the second quarter we should be aware of” were set aside by Chief Financial Officer Jeffrey Edwards during that talk with analysts.
“We put forth the set of numbers that represent our conservative estimates,” Edwards said.
Allergan does expect some boost from a promotion called Duet Dividends, where doctors can purchase Botox Cosmetic and Juvéderm lower-face filler together, as well as coupons they can offer patients “encouraging them to have the treatment of the duet,” Pyott said.
Allergan decided to start Duet Dividends in the current quarter because “we wanted to welcome our German friends to America,” Pyott said.
He was referring to Merz Pharma GmbH, which planned to introduce potential Botox competitor Xeomin to the market before U.S. District Judge Andrew Guilford of Santa Ana blocked that plan in March with an injunction. The court found Merz Pharma improperly obtained trade secrets from recent hires of Allergan veterans.
Separately, a Securities and Exchange Commission filing by Allergan shortly before its quarterly earnings were released disclosed the company has received a subpoena from the Department of Health and Human Services’ Inspector General in regard to its Lap-Band weight-loss device.
Some members of the U.S. House of Representatives earlier this year called for hearings on various medical devices, including the Lap-Band, after an article in the Archives of Surgery medical journal raised questions about the effectiveness of the device.
