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Allergan plc’s fourth-quarter 2016 earnings came in at $3.90 per share, beating the Zacks Consensus Estimate of $3.79 by 2.9%. Earnings also soared 16.1% year over year and 17.5% sequentially on the back of strong revenues.
Revenues came in at $3.86 billion, up 7.1% from the year-ago period, and beat the Zacks Consensus Estimate of $3.771 billion by 2.5%. Strong performance of key products like Botox and Linzess, and new product launches partially offset the lower sales of established products like Namenda IR/XR and Asacol HD sales due to loss of exclusivity.
Quarterly Details
The company reports revenues under three segments – U.S. General Medicine, U.S. Specialized Therapeutics and International.
U.S. Specialized Therapeutics’ net revenues increased 11% to $1.57 billion driven by strong growth in Eye Care, Facial Aesthetics, and Neuroscience & Urology. Products like Botox (cosmetic) and Restasis raked in sales of $199.4 million (up 18%) and $393.1 million (up 13%), respectively. While Botox sales were driven by continued strong demand for the product, Restasis benefited from higher pricing and demand growth. Botox Therapeutic revenues were $313.5 million, up 14%. In addition, Fillers revenues of 25% and Ozurdex sales of 18% contributed to the upside.
U.S. General Medicine net revenues were flat at $1.53 billion in the reported quarter as a decline in Central Nervous System and Diversified Brands sales was partially offset by strong growth in Women's Health. Sales at the Gastrointestinal franchise remained flat in the quarter.
Established products like Linzess, Lo Loestrin, Estrace Cream, as well as new products like Viberzi, Dalvance and Vraylar put up a robust performance. However, lower Namenda IR and XR sales hurt the performance of the CNS franchise. Namenda IR sales plunged 90.2% to $2.3 billion. On the other hand, Namenda XR sales declined 26% to $141.1 million in the quarter due to lower demand and a higher discount rate to maintain broad formulary coverage. Namzaric, a once-daily, fixed-dose combination of Namenda XR and Aricept, recorded sales of $19.5 million compared with $14.9 million in the previous quarter. Asacol/Delzicol sales declined 57% due to a reduction in demand for Ascaol HD following the launch of an authorized generic in Aug 2016.
The International segment recorded net revenues of $753.2 million, up 11% from the year-ago period. Growth was driven by Eye Care, Facial Aesthetics and Botox revenues.
2016 Results
Full-year sales improved 14.8% to $14.57 billion, marginally beating the Zacks Consensus Estimate of $14.49 billion. Revenues were within management’s guided range $14.45 billion to $14.65 billion
Adjusted earnings came in at $13.51 per share, up 2.3% year over year, and surpassed the Zacks Consensus Estimate of $13.39. Earnings were also slightly above the projected range of $13.30–$13.50.
2017 Outlook
Allergan expects total revenue in the range of $15.5 billion to $15.8 billion in 2017. The range was above the Zacks Consensus Estimate of $15.33 billion. For the first quarter, the company said it expects revenues of approximately $3.5 billion.
Adjusted earnings are expected in the range of $15.80–$16.30 per share. The Zacks Consensus Estimate is pegged at $15.91.
Last month, Allergan had provided a preliminary outlook for 2017. It said then that revenues are projected to grow in the mid-single digits, while earnings will improve in the double digits.
The company expects stable Restasis revenues, while Namenda franchise sales will continue to erode in 2017, especially with the expected entry of a generic version of Namenda XR in the fourth quarter of 2017.
While R&D expenses are expected in the range of $1.45 billion to $1.55 billion, SG&A spend is expected between $4.3 billion and $4.4 billion.
Our Take
After weak revenues in the third quarter, Allergan bounced back with strong fourth-quarter results, wherein both earnings and sales beat estimates. Meanwhile, the company’s 2017 sales outlook was above expectations, driving shares up 1.3% in pre-market trading. In fact, Allergan’s share price was up 10.7% this year so far, while the Zacks classified Medical-Generics Drug industry rose 3.0%.
The drugmaker sold its generics and Anda distribution business to Teva Pharmaceutical Industries Limited (TEVA - Free Report) in Aug and Oct 2016, respectively.
With the closing of the Teva deal, Allergan has become a “branded biopharmaceutical leader”. As a result, it can now focus on the branded segment and is using the proceeds to buy back shares, pay down debt and pursue additional deals. It also boasts a strong pipeline with nine product launches planned in 2017.
We are also encouraged by Allergan’s focus on building its branded and biosimilars pipeline. Allergan has a collaboration agreement with Amgen, Inc. (AMGN - Free Report) for the worldwide development and commercialization of four oncology antibody biosimilars, which include biosimilars of Roche Holding AG’s (RHHBY - Free Report) cancer drugs Herceptin and Avastin.
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Allergan (AGN) Tops Q4 Earnings; 2017 Sales View Upbeat
Allergan plc’s fourth-quarter 2016 earnings came in at $3.90 per share, beating the Zacks Consensus Estimate of $3.79 by 2.9%. Earnings also soared 16.1% year over year and 17.5% sequentially on the back of strong revenues.
Revenues came in at $3.86 billion, up 7.1% from the year-ago period, and beat the Zacks Consensus Estimate of $3.771 billion by 2.5%. Strong performance of key products like Botox and Linzess, and new product launches partially offset the lower sales of established products like Namenda IR/XR and Asacol HD sales due to loss of exclusivity.
Quarterly Details
The company reports revenues under three segments – U.S. General Medicine, U.S. Specialized Therapeutics and International.
U.S. Specialized Therapeutics’ net revenues increased 11% to $1.57 billion driven by strong growth in Eye Care, Facial Aesthetics, and Neuroscience & Urology. Products like Botox (cosmetic) and Restasis raked in sales of $199.4 million (up 18%) and $393.1 million (up 13%), respectively. While Botox sales were driven by continued strong demand for the product, Restasis benefited from higher pricing and demand growth. Botox Therapeutic revenues were $313.5 million, up 14%. In addition, Fillers revenues of 25% and Ozurdex sales of 18% contributed to the upside.
U.S. General Medicine net revenues were flat at $1.53 billion in the reported quarter as a decline in Central Nervous System and Diversified Brands sales was partially offset by strong growth in Women's Health. Sales at the Gastrointestinal franchise remained flat in the quarter.
Established products like Linzess, Lo Loestrin, Estrace Cream, as well as new products like Viberzi, Dalvance and Vraylar put up a robust performance. However, lower Namenda IR and XR sales hurt the performance of the CNS franchise. Namenda IR sales plunged 90.2% to $2.3 billion. On the other hand, Namenda XR sales declined 26% to $141.1 million in the quarter due to lower demand and a higher discount rate to maintain broad formulary coverage. Namzaric, a once-daily, fixed-dose combination of Namenda XR and Aricept, recorded sales of $19.5 million compared with $14.9 million in the previous quarter. Asacol/Delzicol sales declined 57% due to a reduction in demand for Ascaol HD following the launch of an authorized generic in Aug 2016.
The International segment recorded net revenues of $753.2 million, up 11% from the year-ago period. Growth was driven by Eye Care, Facial Aesthetics and Botox revenues.
2016 Results
Full-year sales improved 14.8% to $14.57 billion, marginally beating the Zacks Consensus Estimate of $14.49 billion. Revenues were within management’s guided range $14.45 billion to $14.65 billion
Adjusted earnings came in at $13.51 per share, up 2.3% year over year, and surpassed the Zacks Consensus Estimate of $13.39. Earnings were also slightly above the projected range of $13.30–$13.50.
2017 Outlook
Allergan expects total revenue in the range of $15.5 billion to $15.8 billion in 2017. The range was above the Zacks Consensus Estimate of $15.33 billion. For the first quarter, the company said it expects revenues of approximately $3.5 billion.
Adjusted earnings are expected in the range of $15.80–$16.30 per share. The Zacks Consensus Estimate is pegged at $15.91.
Last month, Allergan had provided a preliminary outlook for 2017. It said then that revenues are projected to grow in the mid-single digits, while earnings will improve in the double digits.
The company expects stable Restasis revenues, while Namenda franchise sales will continue to erode in 2017, especially with the expected entry of a generic version of Namenda XR in the fourth quarter of 2017.
While R&D expenses are expected in the range of $1.45 billion to $1.55 billion, SG&A spend is expected between $4.3 billion and $4.4 billion.
Our Take
After weak revenues in the third quarter, Allergan bounced back with strong fourth-quarter results, wherein both earnings and sales beat estimates. Meanwhile, the company’s 2017 sales outlook was above expectations, driving shares up 1.3% in pre-market trading. In fact, Allergan’s share price was up 10.7% this year so far, while the Zacks classified Medical-Generics Drug industry rose 3.0%.
The drugmaker sold its generics and Anda distribution business to Teva Pharmaceutical Industries Limited (TEVA - Free Report) in Aug and Oct 2016, respectively.
With the closing of the Teva deal, Allergan has become a “branded biopharmaceutical leader”. As a result, it can now focus on the branded segment and is using the proceeds to buy back shares, pay down debt and pursue additional deals. It also boasts a strong pipeline with nine product launches planned in 2017.
We are also encouraged by Allergan’s focus on building its branded and biosimilars pipeline. Allergan has a collaboration agreement with Amgen, Inc. (AMGN - Free Report) for the worldwide development and commercialization of four oncology antibody biosimilars, which include biosimilars of Roche Holding AG’s (RHHBY - Free Report) cancer drugs Herceptin and Avastin.
Allergan PLC. Price, Consensus and EPS Surprise
Allergan PLC. Price, Consensus and EPS Surprise | Allergan PLC. Quote
Allergan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>