Allergan Reports Fourth Quarter and Full-Year 2019 Financial Results

• Full-Year 2019 GAAP Net Revenues of $16.1 Billion; Q4 2019 GAAP Net Revenues of $4.4 Billion
• Full-Year 2019 GAAP Loss Per Share of $16.02; Non-GAAP Performance Net Income Per Share of $17.64
• Q4 2019 GAAP Loss Per Share of $0.97; Non-GAAP Performance Net Income Per Share of $5.22
• Q4 2019 GAAP Operating Loss of $276.6 Million; Non-GAAP Operating Income of $2.08 Billion
• Full-Year and Q4 2019 GAAP Net Revenue Driven by Growth in Top Promoted Products Including VRAYLAR®, BOTOX®, JUVÉDERM® Collection, OZURDEX® and Lo LOESTRIN®; Global Facial Aesthetics Rose 9.5% in FY 2019 and 8.2% in Q4 2019 (Excluding Exchange)
• Continues to Advance R&D Pipeline on Key Programs Including FDA Approval of UBRELVY™ (Ubrogepant) for Migraine; Bimatoprost SR for Glaucoma NDA and Abicipar for Wet Age-Related Macular Degeneration BLA Under FDA Review

DUBLIN, Feb. 10, 2020 /PRNewswire/ -- Allergan plc (NYSE: AGN) today reported its full-year and fourth quarter 2019 financial results including full-year 2019 GAAP net revenues of $16.1 billion, a 1.9 percent increase from 2018. Fourth quarter 2019 GAAP net revenues were $4.35 billion, a 6.6 percent increase from the prior year quarter.

FOURTH QUARTER AND FULL-YEAR 2019 FINANCIAL RESULTS

Executive Commentary

“I am proud of Allergan’s colleagues who achieved many important milestones in 2019 that will make a difference to patients for years to come. They achieved FDA approval of UBRELVY™, a first-in-class oral treatment for migraine; two new approvals for BOTOX^® for pediatric spasticity; approval for VRAYLAR^® for bipolar depression; and filings for two new eye care drugs - Bimatoprost SR for glaucoma and Abicipar for Age-related Macular Degeneration,” said Brent Saunders, Chairman and CEO of Allergan. “Our colleagues also grew our core business¹ by 7.1 percent in 2019 and by 11.0 percent in the fourth quarter (excluding exchange), creating strong momentum for 2020 and our proposed combination with AbbVie.”

Full-Year 2019 Financial Results

GAAP operating loss in 2019 was $4.45 billion compared with $6.25 billion in 2018. Non-GAAP operating income, which excludes the impact of impairments, amortization and other items, was $7.31 billion in 2019 compared to $7.56 billion in 2018. GAAP cash flow from operations for the full year of 2019 totaled $7.24 billion. Cash flow from operations for the full year of 2019 includes a one-time $1.6 billion refund of taxes previously paid on capital gains. The tax refund was accrued in a prior period and the cash was received in the third quarter of 2019.

Fourth Quarter 2019 Financial Results

GAAP operating loss in the fourth quarter of 2019 was $276.6 million. Non-GAAP operating income in the fourth quarter of 2019 was $2.08 billion, an increase of 8.4 percent versus the prior year quarter. GAAP cash flow from operations for the fourth quarter of 2019 totaled $1.67 billion.

Operating Expenses

Total GAAP Selling, General and Administrative (SG&A) Expense was $1.64 billion for the fourth quarter of 2019, compared to $1.19 billion in the prior year quarter. Total non-GAAP SG&A expense was $1.16 billion for the fourth quarter of 2019, an increase of 1.9 percent from the prior year quarter, primarily related to an increase in spending to support key products and new product launches. GAAP R&D investment for the fourth quarter of 2019 was $452.5 million, compared to $678.1 million in the fourth quarter of 2018. Non-GAAP R&D investment for the fourth quarter of 2019 was $414.8 million, a decrease of 4.9 percent compared to the prior year quarter.

Amortization, Tax and Capitalization

Amortization expense for the fourth quarter of 2019 was $1.52 billion, compared to $1.57 billion in the fourth quarter of 2018. The Company’s GAAP tax rate was 24.8 percent in the fourth quarter of 2019. The Company’s non-GAAP adjusted tax rate was 10.3 percent in the fourth quarter of 2019. As of December 31, 2019, Allergan had cash and marketable securities of $5.91 billion and outstanding indebtedness of $22.6 billion.

Operating Charges and Impairments

Allergan recorded a pre-tax charge of $302.5 million in the three months ended December 31, 2019 related to settlements reached in principle by subsidiaries Warner Chilcott and Watson with direct and indirect purchasers of LOESTRIN^® 24 Fe and MINASTRIN^® 24 Fe, resolving class action litigations pending in the U.S. District Court for the District of Rhode Island. Additionally, Allergan recorded a pre-tax charge of $78.8 million in the three months ended December 31, 2019 related to settlements reached in principle by its Allergan Inc. subsidiary with a putative plaintiff class of direct purchasers of RESTASIS^®, as well as a group of pharmaceutical retailers, in the previously disclosed direct purchaser class action antitrust litigation pending in the U.S. District Court for the Eastern District of New York. Also in the fourth quarter of 2019, Allergan recorded a $314.0 million GAAP intangible asset impairment related to CARAFATE^® due to the entry of a generic competitor. The Company excludes operating charges, asset sales and impairments, net and in-process research and development impairments from its Non-GAAP performance net income attributable to shareholders as well as Adjusted EBITDA and Non-GAAP Operating Income.

¹ Core business = Promoted Brands & Brands with Ongoing Exclusivity + Other Product Revenues & Other Revenues (See Table 12)

FOURTH QUARTER 2019 BUSINESS SEGMENT RESULTS

U.S. Specialized Therapeutics

U.S. Specialized Therapeutics net revenues were $1.82 billion in the fourth quarter of 2019, an increase of 0.7 percent versus the prior year quarter. Demand growth in BOTOX^® Therapeutic, BOTOX^® Cosmetic, ALLODERM^® and JUVÉDERM^® Collection was offset by a decline in sales of CoolSculpting^® and lower RESTASIS^® revenues compared to the prior year quarter. Segment gross margin for the fourth quarter of 2019 was 91.4 percent. Segment contribution for the fourth quarter of 2019 was $1.24 billion.

Medical Aesthetics

• Facial Aesthetics
  • BOTOX^® Cosmetic net revenues in the fourth quarter of 2019 were $271.8 million, an increase of 5.3 percent from the prior year quarter. For full-year 2019, BOTOX^® Cosmetic net revenues were $991.3 million, an increase of 9.3 percent from 2018.
  • JUVÉDERM^® Collection (defined as JUVÉDERM^®, VOLUMA^® and other fillers) net revenues in the fourth quarter of 2019 were $166.4 million, an increase of 5.1 percent versus the prior year quarter. For full-year 2019, JUVÉDERM^® Collection net revenues were $587.5 million, an increase of 7.2 percent from 2018.
• Regenerative Medicine
  • ALLODERM^® net revenues in the fourth quarter of 2019 were $104.7 million, an increase of 10.3 percent versus the prior year quarter.
• Body Contouring
  • CoolSculpting^® net revenues (including both CoolSculpting^® Systems/Applicators and Consumables) in the fourth quarter of 2019 were $53.3 million, a decrease of 34.4 percent from the prior year quarter.
  • CoolTone™ received regulatory clearance in the U.S. in 2019 and full launch began in January 2020.

Neurosciences & Urology

• BOTOX^® Therapeutic net revenues in the fourth quarter of 2019 were $463.0 million, an increase of 6.9 percent versus the prior year quarter.

Eye Care

• RESTASIS^® net revenues in the fourth quarter of 2019 were $309.0 million, a decrease of 4.9 percent versus the prior year quarter.
• ALPHAGAN^®/COMBIGAN^® net revenues in the fourth quarter of 2019 were $94.5 million, a decrease of 3.3 percent versus the prior year quarter.
• OZURDEX^® net revenues in the fourth quarter of 2019 were $31.6 million, an increase of 7.8 percent versus the prior year quarter.

U.S. General Medicine

U.S. General Medicine net revenues in the fourth quarter of 2019 were $1.61 billion, an increase of 15.2 percent versus the prior year quarter. Demand growth in VRAYLAR^®, LINZESS^®, VIIBRYD^® and Lo LOESTRIN^® was partially offset by lower revenues from products that lost exclusivity. Segment gross margin for the fourth quarter of 2019 was 82.1 percent. Segment contribution for the fourth quarter of 2019 was $1.03 billion.

Central Nervous System

• VRAYLAR^® net revenues were $283.1 million in the fourth quarter of 2019, an increase of 88.1 percent from the prior year quarter. For full-year 2019, VRAYLAR^® net revenues were $857.5 million, an increase of 76.0 percent from 2018.
• VIIBRYD^®/FETZIMA^® net revenues in the fourth quarter of 2019 were $114.2 million, an increase of 19.6 percent from the prior year quarter.

Gastrointestinal, Women’s Health & Diversified Brands

• LINZESS^® net revenues in the fourth quarter of 2019 were $231.2 million, an increase of 12.7 percent versus the prior year quarter.
• Lo LOESTRIN^® net revenues in the fourth quarter of 2019 were $156.2 million, an increase of 8.6 percent versus the prior year quarter.
• BYSTOLIC^®/BYVALSON^® net revenues in the fourth quarter of 2019 were $169.6 million, an increase of 11.8 percent from the prior year quarter.

International

International net revenues in the fourth quarter of 2019 were $917.7 million, an increase of 8.1 percent versus the prior year quarter excluding foreign exchange impact, partly due to growth in Facial Aesthetics, BOTOX^® Therapeutic and OZURDEX^®. Segment gross margin for the fourth quarter of 2019 was 83.8 percent. Segment contribution was $515.8 million.

Facial Aesthetics

• BOTOX^® Cosmetic net revenues in the fourth quarter of 2019 were $182.9 million, an increase of 19.8 percent versus the prior year quarter excluding foreign exchange impact. For full-year 2019, BOTOX^® Cosmetic net revenues were $671.7 million, an increase of 11.2 percent from 2018 excluding foreign exchange impact.
• JUVÉDERM^® Collection net revenues in the fourth quarter of 2019 were $180.9 million, an increase of 5.7 percent versus the prior year quarter excluding foreign exchange impact. For full-year 2019, JUVÉDERM^® Collection net revenues were $656.1 million, an increase of 12.1 percent from 2018 excluding foreign exchange impact.

Eye Care

• LUMIGAN^®/GANFORT^® net revenues in the fourth quarter of 2019 were $95.6 million, an increase of 1.4 percent versus the prior year quarter excluding foreign exchange impact.
• OZURDEX^® net revenues in the fourth quarter of 2019 were $66.7 million, an increase of 132.8 percent versus the prior year quarter excluding foreign exchange impact. OZURDEX^® growth was primarily related to a return to full stock in 2019 following a 2018 recall of OZURDEX^® in certain international markets.

Botox^® Therapeutic

• BOTOX^® Therapeutic net revenues in the fourth quarter of 2019 were $102.5 million, an increase of 8.9 percent versus the prior year quarter excluding foreign exchange impact.

PIPELINE UPDATE

Allergan R&D continues to advance its pipeline. During the fourth quarter of 2019, the Company’s key clinical developments included:

• Allergan received approval from the U.S. Food and Drug Administration (FDA) for the Company’s New Drug Application (NDA) for UBRELVY™ (ubrogepant) for the acute treatment of migraine with or without aura in adults. UBRELVY™ is a first-in-class oral CGRP receptor antagonist (gepant) for the treatment of migraine attacks once they start. Launch began in January 2020.
• Allergan announced the FDA has granted Qualified Infectious Disease Product (QIDP) Designation and Fast Track Designation for ATM-AVI (aztreonam and avibactam) for the treatment of antibiotic-resistant gram-negative infections including complicated intra-abdominal infections (cIAI), complicated urinary tract infections (cUTI) and hospital-acquired bacterial pneumonia (HABP)/ventilator-associated bacterial pneumonia (VABP). ATM-AVI is an investigational, fixed-dose, intravenous combination antibiotic being developed jointly with Pfizer.
• The FDA approved Allergan’s supplemental Biologics License Application (sBLA) to expand the BOTOX^® (onabotulinumtoxinA) label for the treatment of pediatric patients ages two years and older with lower limb spasticity, excluding spasticity caused by cerebral palsy. This marks the 14th approved indication for BOTOX^® and BOTOX^® Cosmetic combined in the U.S., and the 11th BOTOX^® therapeutic indication. The FDA approved BOTOX^® (onabotulinumtoxinA) for pediatric upper limb spasticity in the second quarter of 2019.

In addition to fourth quarter 2019 pipeline developments listed above, Allergan expects two additional significant launches in the next twelve months:

• FDA action is expected in the first half of 2020 on Allergan’s NDA for Bimatoprost Sustained-Release, a biodegradable implant for the reduction of intraocular pressure in patients with open-angle glaucoma or ocular hypertension. Launch is expected to follow in the first half of 2020.
• The FDA is currently reviewing a Biologics License Application (BLA) for Abicipar pegol, a novel, investigational DARPin^® therapy, in patients with neovascular (wet) age-related macular degeneration (nAMD). The FDA is expected to take action on the BLA in mid-2020, with launch expected to follow. The European Medicines Agency (EMA) is also reviewing a Marketing Authorisation Application (MAA) for Abicipar in patients with nAMD. A decision from the European Commission is expected in the second half of 2020.

UPDATE ON PROPOSED ABBVIE TRANSACTION

On January 10, 2020, AbbVie and Allergan received conditional approval from the European Commission for AbbVie’s proposed acquisition of Allergan, subject to the approved divestiture of brazikumab (IL-23 inhibitor) and other conditions.

On January 27, 2020, Allergan announced that it entered into definitive agreements to divest brazikumab and ZENPEP^® (pancrelipase) in conjunction with the ongoing regulatory approval process for the proposed transaction.

AstraZeneca will acquire brazikumab, currently in Phase 2b/3 development for Crohn’s Disease and in Phase 2 development for ulcerative colitis, including global development and commercial rights.

Nestle will acquire and take full operational ownership of ZENPEP^® upon closing the transaction with customary transition support from Allergan. ZENPEP^® is a treatment, which is available in the United States, for exocrine pancreatic insufficiency due to cystic fibrosis and other conditions. Nestle also will be acquiring Viokace, another pancreatic enzyme preparation, as part of the same transaction.

The closings of the divestitures of brazikumab and ZENPEP^® are contingent upon receipt of U.S. Federal Trade Commission and European Commission approval, closing of AbbVie’s pending acquisition of Allergan and the satisfaction of other customary closing conditions.

Allergan expects the close of the pending AbbVie transaction around the end of the first quarter 2020, subject to receipt of required regulatory approvals and other closing conditions.

Due to the pending transaction, Allergan is not hosting a conference call to discuss its fourth quarter and full-year 2019 results.

About Allergan plc

Allergan plc (NYSE: AGN), headquartered in Dublin, Ireland, is a global pharmaceutical leader focused on developing, manufacturing and commercializing branded pharmaceutical, device, biologic, surgical and regenerative medicine products for patients around the world. Allergan markets a portfolio of leading brands and best-in-class products primarily focused on four key therapeutic areas including medical aesthetics, eye care, central nervous system and gastroenterology. As part of its approach to delivering innovation for better patient care, Allergan has built one of the broadest pharmaceutical and device research and development pipelines in the industry.

With colleagues and commercial operations located in approximately 100 countries, Allergan is committed to working with physicians, healthcare providers and patients to deliver innovative and meaningful treatments that help people around the world live longer, healthier lives every day.

For more information, visit Allergan’s website at www.Allergan.com.

Forward-Looking Statement

Statements contained in this press release that refer to future events or other non-historical facts are forward-looking statements that reflect Allergan’s current perspective on existing trends and information as of the date of this release. Actual results may differ materially from Allergan’s current expectations depending upon a number of factors affecting Allergan’s business. These factors include, among others, the difficulty of predicting the timing or outcome of FDA approvals or actions, if any; the impact of competitive products and pricing; market acceptance of and continued demand for Allergan’s products; the impact of uncertainty around timing of generic entry related to key products, including RESTASIS^®, on our financial results; risks associated with divestitures, acquisitions, mergers and joint ventures; risks related to impairments; uncertainty associated with financial projections, projected debt reduction, projected cost reductions, projected synergies, restructurings, increased costs, and adverse tax consequences; difficulties or delays in manufacturing; risks related to the proposed transaction between AbbVie and Allergan, such as, but not limited to, failure to complete the possible transaction, failure to realize the expected benefits of the possible transaction, and general economic and business conditions affecting the combined company following the consummation of the possible transaction;and other risks and uncertainties detailed in Allergan’s periodic public filings with the Securities and Exchange Commission, including but not limited to Allergan’s Annual Report on Form 10-K for the year ended December 31, 2018 and Allergan’s Quarterly Report on Form 10-Q for the period ended September 30, 2019. Except as expressly required by law, Allergan disclaims any intent or obligation to update these forward-looking statements.

Statements Required by the Irish Takeover Rules

No statement in this press release is intended to constitute a profit forecast for any period, nor should any statements be interpreted to mean that earnings or earnings per share will necessarily be greater or lesser than those for the relevant preceding financial periods for Allergan. No statement in this press release constitutes an asset valuation.

The directors of Allergan accept responsibility for the information contained in this press release. To the best of the knowledge and belief of the directors of Allergan (who have taken all reasonable care to ensure that such is the case), the information contained in this press release is in accordance with the facts and does not omit anything likely to affect the import of such information.

Any holder of 1% or more of any class of relevant securities of Allergan may have disclosure obligations under Rule 8.3 of the Irish Takeover Panel Act, 1997, Takeover Rules 2013.

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SOURCE Allergan plc

Company Codes: NYSE:AGN