A big performance from its flagship and contributions from a newer product paid off for Irvine drug maker Allergan Inc. in the second quarter.
Allergan saw sales of its core Botox drug rise 16% to $418 million in the second quarter.
Botox and other products helped the company beat earnings and revenue performance estimates.
Botox is sold for cosmetic and therapeutic uses. It received Food and Drug Administration approval last October for chronic migraine headaches, a use that analysts have said could eventually add up to $500 million in annual sales for the drug.
Analysts were “pretty encouraged that the aesthetic side of the house continues to perform well,” said Chief Executive David Pyott.
The drug maker does not break out Botox sales by category, but Pyott said there was “good growth” in sales for cosmetic and therapeutic uses.
“I talked about the U.S. neuromodulator market for aesthetics growing around or about the mid-teens (and) even Europe, with its economic challenges, probably growing in the high single digits,” he said.
Botox for chronic migraine is doing well in its introduction, according to Pyott.
“There’s considerable interest in the neurology community,” he said.
Allergan has trained about 3,500 doctors on how to inject the drug for chronic migraine headache sufferers. And “reimbursement’s going real well—about three-quarters of all commercial (insurance) lives are covered,” Pyott said.
Positive Predictions
“We continue to believe that Botox therapeutic in the chronic migraine indication will perform well” in the second half of this year and 2012 as other parts of Allergan’s business continue growing, Seamus Fernandez, an analyst with Boston-based Leerink Swann LLC, said in a client note.
Botox appears to be recession-resistant, according to Gary Nachman, an analyst with New York-based Susquehanna Investment Group LLP.
“Your existing patient base won’t go away,” Nachman told Bloomberg prior to Allergan’s earnings report. “They may time the procedures a little differently, but once they get used to looking younger, they don’t want to change that.”
More Botox uses could be on the way.
U.S. regulators are considering whether to approve Botox for neurogenic overactive bladder, which stems from neuromuscular conditions such as multiple sclerosis.
“We await FDA regulatory action for this indication later this year,” Pyott said on Allergan’s earnings call.
Allergan just got a positive opinion from Irish regulators about using Botox to manage urinary incontinence in adults with neurogenic overactive bladder.
The Irish Medicines Board’s decision “will also bolster confidence for the drug’s prospects” among 14 European countries that participate in a regulatory process called the “mutual recognition procedure,” where Allergan is pursuing the neurogenic overactive bladder approval, according to I.H.S. Global Insight Limited, an independent economic research firm in Lexington, Mass.
Implants Up
Second-quarter breast implant sales came in at $95.5 million, up 17% from the same period a year ago.
“The fact that breast aesthetics grew by 17% in dollars and 12% in local currencies, that’s pretty good,” Pyott said.
He also said the company has benefited by a continuing trend of market preference for silicone gel breast implants, which are more expensive.
“Saline is kind of rapidly going away,” Pyott said.
Overall, Allergan posted a profit of $297.9 million before items during the second quarter, up 13% from a year earlier.
Analysts were looking for Allergan’s second-quarter profit to come in at $294.8 million before items.
Including items, Allergan’s quarterly profit totaled $246.6 million, up 3% from a year ago.
Revenue came in at $1.42 billion, up 14% from a year earlier and topping Wall Street consensus of $1.34 billion.
“You can say when we look at the quarter, we pretty much blew away people (with) all the numbers we produced,” Pyott said.
Raising Outlook
Allergan also raised its 2011 outlook.
The company could see profits of $1.113 billion to $1.127 billion, up from an earlier estimate of $1.104 billion to $1.123 billion.
Analysts are looking for Allergan’s full-year profit to be $1.129 billion.
Allergan said it now expects revenue of $5.22 billion to $5.37 billion, up from a previous forecast of $5.05 billion to $5.25 billion.
Wall Street expects Allergan’s full-year revenue to be $5.31 billion.
“If you look at the guidance for the year, we raised the top end of the guidance by $120 million, (and) we raised pretty much the numbers for every single product line with the exception of Lap-Band, which we took down $20 million to $40 million,” Pyott said.
Lap-Band is Allergan’s weight-loss device.
