Allergan Sales Rose Nearly 16 Percent in Second Quarter

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IRVINE, Calif.— Allergan (NYSE: AGN) reported $1,827.3 million total product net sales for the quarter ended June 30, 2014, a 15.9 percent compared to total product net sales in the second quarter of 2013.

Total specialty pharmaceuticals net sales increased 13.2 percent, or 13.7 percent on a constant currency basis, compared to total specialty pharmaceuticals net sales in the second quarter of 2013. Total core medical devices net sales increased 25.8 percent, or 26.1 percent on a constant currency basis, compared to total core medical devices net sales in the second quarter of 2013.

Total specialty pharmaceuticals and core medical devices net sales, which exclude sales from the transition services agreements related to the sale of the obesity intervention business unit, increased 15.1 percent, or 15.5 percent on a constant currency basis, compared to total specialty pharmaceuticals and core medical devices net sales in the second quarter of 2013. Revenue from sales of eyecare pharmaceuticals rose 14.5 percent in the second quarter of 2014, to $827 million.

“With continuing strong momentum, Allergan recorded the strongest increase in absolute dollar sales in any quarter in our history, and again delivered sales and earnings per share growth above the high end of our expectations,” said David E.I. Pyott, Allergan’s chairman of the board and CEO. “Furthermore, we are pleased with the progression of key clinical programs into Phase 3 as well as the recent FDA approval of OZURDEX for Diabetic Macular Edema.”

As part of an ongoing effort to improve efficiency and productivity which will further increase stockholder value, Allergan recently completed a global review of its structures and processes, portfolio of research and development projects and marketed products, and its geographies in an effort to prioritize the highest value investments, according to the company.

As a result of this review, Allergan will execute a restructuring in the remainder of 2014 that it estimates will deliver annual pre-tax savings of approximately $475 million in calendar year 2015 as compared to previously communicated 2015 expectations. Such savings will come from efficiencies and reductions in spending across the commercial organization, general and administrative functions, manufacturing and the research and development organization.

As part of the restructuring, Allergan will reduce its workforce by approximately 1,500 employees, or approximately 13 percent of its current global headcount, and eliminate an additional approximately 250 vacant positions.

Allergan is in the midst of a takeover battle with Valeant Pharmaceuticals International (NYSE:VRX) (TSX:VRX),which made an initial hostile bid on April 22 for all of Allergan’s outstanding shares for a combination of 0.83 of Valeant common shares and $48.30 in cash per share of Allergan’s common stock. On June 2, Valeant Pharmaceuticals International, Inc. again increased its offer to acquire Allergan, Inc. under which each Allergan share would be exchanged for $72.00 in cash and 0.83 shares of Valeant common stock.

Allergan’s board of directors, in consultation with its financial and legal advisors, have unanimously rejected each of these unsolicited proposals, concluding “that each substantially undervalues Allergan, creates significant risks and uncertainties for the stockholders of Allergan, and is not in the best interests of the Company and its stockholders.”

For the full year of 2014, Allergan said it expects total product net sales between $6,900 million and $7,050 million, excluding any future anticipated revenue from the transition services agreements related to the sale of the obesity intervention business.