Headquarters: 2525 Dupont Drive, Irvine
Employees: 8,000; 2,072 in OC
Business: Drug maker
Market Value as of April 1: $14.6 billion
Revenue for 12 months ended Dec. 31: $4.3 billion, up 12%
Net income for 12 months ended Dec. 31: $578.6 million, up 16%
Year in review: Allergan is best-known for wrinkle-removing Botox, but its historical eye drug business carried it in 2008, growing 13% compared to Botox’s 8% gain.
Allergan’s medical cosmetic business,which also includes lower-face wrinkle fillers, breast implants and Lap-Band, a stomach banding system used to treat obesity,began to show vulnerability because of cost-conscious patients cutting back on procedures they pay for themselves.
Allergan launched products, including Latisse for growing eyelashes, which uses bimatoprost, the active ingredient in its Lumigan drug for treating glaucoma. On the skincare front, Allergan teamed up with Clinique Laboratories, a unit of Este & #233; Lauder Cos., to launch Clinique Medical, which is sold in doctors’ offices.
And Allergan continued to create a buffer zone around its campus buying adjacent office buildings, including the $22
million acquisition of Maguire Properties Inc.’s office building on Teller Avenue last month.
What’s ahead: Allergan has said it expects 2009 to be a tough year amid concerns about an ongoing downturn in Botox and other procedures that patients pay for out of their own pockets.
Allergan expects its first-quarter earnings to come in at $152.1 million to $158.2 million, well below analysts’ expectations of $185.6 million. Revenue is projected at $960 million to $1 billion, versus the $1.05 billion analysts are looking for.
The company also said it was cutting 460 employees, or about 5% of its total work force.
Allergan has said it is on the lookout for deals. Chief Executive David Pyott recently told Bloomberg that it wanted to buy companies to build up its medical cosmetics niche and noted that it had more than $1 billion in the bank.
Allergan is facing stepped-up competition.
In January, Johnson & Johnson spent $1.1 billion for Mentor Corp., a Santa Barbara-based Allergan competitor that makes breast implants.
The Food and Drug Administration is expected to decide next week if Reloxin, a potential Botox rival marketed by Medicis Pharmaceutical Corp. of Scottsdale, will be approved for sale. Allergan once had rights to Reloxin, but had to divest them as part of its 2006 buy of Inamed Corp.
Meanwhile, Allergan is taking actions to remind doctors and patients of Botox’s efficiency and safety record as the drug marks its 20th anniversary, including conducting a Web seminar with patients.
Wall Street’s take: Concerns about Allergan’s involvement in elective medical procedures are hitting the company’s stock. During the past 12 months, Allergan’s shares dropped 15%, but still have outperformed the Standard & Poor’s 500, which was down 40% in the past 12 months. The company had a recent market value of $14.6 billion.
Allergan saw a surge in its shares roughly three weeks ago after DealReporter.com,
a stock blog, reported that Britain’s GlaxoSmithKline PLC could be interested in buying the company. GlaxoSmithKline’s predecessor SmithKline Beecham PLC acquired Allergan in 1980 and later spun off the business.
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Vita Reed
WHO’S IN CHARGE
DAVID PYOTT
Chairman, chief executive
Joined company: 1998
Education: holds diploma in German, European law from University of Amsterdam, master’s from University of Edinburgh, business master’s from London Business School
Career: Joined Sandoz, which became part of Novartis AG, in 1980. Spent 15 years in various positions with drug maker. Named head of Sandoz Nutrition unit in 1995.
Notable: Urbane multilingual executive drives sporty Aston-Martin car. Otherwise, frugal and unflashy with droll sense of humor.
