Allergan Reports Second Quarter 2019 Financial Results

• Q2 2019 GAAP Net Revenues of $4.09 Billion
• Q2 2019 GAAP Loss Per Share of $5.37; Non-GAAP Performance Net Income Per Share of $4.38
• Q2 2019 GAAP Operating Loss of $1.26 Billion; Non-GAAP Operating Income of $1.85 Billion
• Q2 2019 GAAP Net Revenue Driven by Growth in Top Promoted Products Including BOTOX®, VRAYLAR®, JUVÉDERM® Collection, Lo LOESTRIN® and OZURDEX®
• Q2 2019 GAAP Revenues and Expenses Impacted by Voluntary Global Recall of BIOCELL® Textured Breast Implants
• Continues to Advance R&D Pipeline on Key Programs Including FDA Approval of VRAYLAR® (Cariprazine) for Bipolar Depression, FDA Clearance of CoolTone™ for Muscle Stimulation; Ubrogepant for Migraine and Bimatoprost SR for Glaucoma NDAs Under FDA Review
• Raises Guidance for Full-Year 2019 Net Revenue; Reaffirms Guidance for Full-Year 2019 Performance Net Income Per Share

DUBLIN, Aug. 6, 2019 /PRNewswire/ -- Allergan plc (NYSE: AGN) today reported its second quarter 2019 financial results including GAAP net revenues of $4.09 billion, a 0.8 percent decrease from the prior year quarter. Excluding foreign exchange impact, second quarter 2019 non-GAAP net revenues increased 1.2 percent from the prior year quarter.

SECOND QUARTER 2019 FINANCIAL RESULTS

Executive Commentary

“In the second quarter of 2019, Allergan delivered steady growth in our key products including BOTOX^®, VRAYLAR^®, JUVÉDERM^®, Lo LOESTRIN^® and OZURDEX^® while we continued to advance our pipeline, highlighted by the FDA’s approval of VRAYLAR^® (Cariprazine) for Bipolar Depression and the NDA acceptance for Bimatoprost SR for Glaucoma,” said Brent Saunders, Chairman and CEO of Allergan. “Our second quarter results demonstrate the continued momentum in our business and our focus on customers. Thank you to the Allergan colleagues around the world who continue to deliver our products to the patients who need them.”

Second Quarter 2019 Results

GAAP operating loss in the second quarter of 2019 was $1.26 billion, including the impact of impairments. Non-GAAP operating income in the second quarter of 2019 was $1.85 billion, a decrease of 6.3 percent versus the prior year quarter, partially impacted by lower revenues due to divestitures, products that lost exclusivity and declines in textured breast implants due to a global recall. GAAP cash flow from operations for the second quarter of 2019 totaled $1.41 billion.

Operating Expenses

Total GAAP Selling, General and Administrative (SG&A) Expense was $1.20 billion for the second 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 second quarter of 2019, an increase of 2.5 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 second quarter of 2019 was $450.0 million, compared to $689.2 million in the second quarter of 2018. Non-GAAP R&D investment for the second quarter of 2019 was $447.0 million, an increase of 14.9 percent compared to the prior year quarter, due to increased direct project spend to support pipeline advancement and new product launches.

Amortization, Tax and Capitalization

Amortization expense for the second quarter of 2019 was $1.40 billion, compared to $1.70 billion in the second quarter of 2018. The Company’s GAAP tax rate was -20.8 percent in the second quarter of 2019. The Company’s non-GAAP adjusted tax rate was 12.8 percent in the second quarter of 2019. As of June 30, 2019, Allergan had cash and marketable securities of $1.97 billion and outstanding indebtedness of $22.7 billion.

Asset Sales & Impairments, Net and In-Process R&D Impairments

Allergan recorded total pre-tax impairment charges of $1.65 billion in the three months ended June 30, 2019. This amount includes a goodwill impairment of $1.09 billion in the General Medicine Reporting unit, primarily due to delays in clinical studies as well as a reduction in the expected value of certain R&D projects. The Company excludes 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.

SECOND QUARTER 2019 BUSINESS SEGMENT RESULTS

U.S. Specialized Therapeutics

U.S. Specialized Therapeutics net revenues were $1.79 billion in the second quarter of 2019, a decrease of 2.3 percent versus the prior year quarter. Demand growth in BOTOX^® and JUVÉDERM^® Collection was offset by a decline in sales of CoolSculpting^® and breast implants compared to the prior year quarter, lower RESTASIS^® revenues and the divestiture of the Company’s Medical Dermatology business on September 20, 2018. Segment gross margin for the second quarter of 2019 was 91.5 percent. Segment contribution for the second quarter of 2019 was $1.23 billion.

Medical Aesthetics

• Facial Aesthetics
  • BOTOX^® Cosmetic net revenues in the second quarter of 2019 were $252.4 million, an increase of 6.7 percent from the prior year quarter.
  • JUVÉDERM^® Collection (defined as JUVÉDERM^®, VOLUMA^® and other fillers) net revenues in the second quarter of 2019 were $156.6 million, an increase of 12.0 percent versus the prior year quarter.
• Regenerative Medicine
  • ALLODERM^® net revenues in the second quarter of 2019 were $101.2 million, a decrease of 5.5 percent versus the prior year quarter.
• Body Contouring
  • CoolSculpting^® net revenues (including both CoolSculpting^® Systems/Applicators and Consumables) in the second quarter of 2019 were $78.9 million, a decrease of 27.1 percent from the prior year quarter.

Neurosciences & Urology

• BOTOX^® Therapeutic net revenues in the second quarter of 2019 were $447.0 million, an increase of 5.9 percent versus the prior year quarter.

Eye Care

• RESTASIS^® net revenues in the second quarter of 2019 were $310.9 million, a decrease of 2.3 percent versus the prior year quarter.
• ALPHAGAN^®/COMBIGAN^® net revenues in the second quarter of 2019 were $91.6 million, a decrease of 6.6 percent versus the prior year quarter.
• OZURDEX^® net revenues in the second quarter of 2019 were $29.9 million, an increase of 8.3 percent versus the prior year quarter.

U.S. General Medicine

U.S. General Medicine net revenues in the second quarter of 2019 were $1.46 billion, an increase of 10.3 percent versus the prior year quarter, primarily due to growth in VRAYLAR^®, VIIBRYD^® and Lo LOESTRIN^®, partially offset by lower revenues from products that lost exclusivity. Segment gross margin for the second quarter of 2019 was 84.1 percent. Segment contribution for the second quarter of 2019 was $943.9 million.

Central Nervous System

• VRAYLAR^® net revenues were $196.1 million in the second quarter of 2019, an increase of 71.7 percent from the prior year quarter.
• VIIBRYD^®/FETZIMA^® net revenues in the second quarter of 2019 were $107.8 million, an increase of 24.3 percent from the prior year quarter.

Gastrointestinal, Women’s Health & Diversified Brands

• LINZESS^® net revenues in the second quarter of 2019 were $196.0 million, an increase of 2.2 percent versus the prior year quarter.
• Lo LOESTRIN^® net revenues in the second quarter of 2019 were $145.5 million, an increase of 13.8 percent versus the prior year quarter.
• BYSTOLIC^®/BYVALSON^® net revenues in the second quarter of 2019 were $150.5 million, an increase of 1.6 percent from the prior year quarter.

International

International net revenues in the second quarter of 2019 were $847.7 million, a decrease of 4.3 percent versus the prior year quarter excluding foreign exchange impact, driven by growth in Facial Aesthetics and OZURDEX^® as well as declines in textured breast implants and LUMIGAN^®/GANFORT^®. Segment gross margin for the second quarter of 2019 was 82.8 percent. Segment contribution was $420.1 million.

Facial Aesthetics

• BOTOX^® Cosmetic net revenues in the second quarter of 2019 were $175.8 million, an increase of 10.7 percent versus the prior year quarter excluding foreign exchange impact.
• JUVÉDERM^® Collection net revenues in the second quarter of 2019 were $172.7 million, an increase of 17.8 percent versus the prior year quarter excluding foreign exchange impact.

Eye Care

• LUMIGAN^®/GANFORT^® net revenues in the second quarter of 2019 were $90.4 million, a decrease of 4.3 percent versus the prior year quarter excluding foreign exchange impact.
• OZURDEX^® net revenues in the second quarter of 2019 were $81.0 million, an increase of 28.1 percent versus the prior year quarter excluding foreign exchange impact.

Botox^® Therapeutic

• BOTOX^® Therapeutic net revenues in the second quarter of 2019 were $98.8 million, an increase of 1.2 percent versus the prior year quarter excluding foreign exchange impact.

PIPELINE UPDATE

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

• Allergan and Gedeon Richter announced that the U.S. Food and Drug Administration (FDA) approved the expanded use of VRAYLAR^® (cariprazine) to treat depressive episodes associated with bipolar I disorder (bipolar depression) in adults. Additionally, VRAYLAR^® (cariprazine) is approved for the treatment of schizophrenia in adults and for the acute treatment of adult patients with manic or mixed episodes associated with bipolar I disorder.
• 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 upper limb spasticity. Additionally, the FDA is reviewing Allergan’s sBLA for the use of BOTOX^® to treat pediatric patients with lower limb spasticity, with a decision expected by the fourth quarter of 2019.
• Allergan received FDA clearance for CoolTone™ to strengthen, tone and firm the muscles of the abdomen, buttocks and thighs. CoolTone™ is a body contouring device that uses magnetic muscle stimulation, or MMS technology, to penetrate into the muscle layers and induce involuntary muscle contractions. Launch is expected in the second half of 2019.
• Allergan announced that the FDA accepted the Company’s New Drug Application (NDA) for Bimatoprost Sustained-Release (SR), a biodegradable implant for the reduction of intraocular pressure in patients with open-angle glaucoma or ocular hypertension. FDA action on the NDA and launch are expected in the first half of 2020.
• The European Medicines Agency (EMA) has validated the Marketing Authorisation Application (MAA) for abicipar, Allergan and Molecular Partners’ novel DARPin^® therapy for the treatment of neovascular age-related macular degeneration. If approved, abicipar is expected to be the first anti-VEGF therapy to sustain vision gains on a true fixed 12-week dosing interval. An EMA decision may be received in the second half of 2020. The U.S. launch, following FDA filing and review, is expected mid-2020.

In addition to second quarter 2019 pipeline developments and the expected launches of Bimatoprost SR, CoolTone™ and abicipar listed above, Allergan anticipates a regulatory decision from the FDA in December 2019 for the Company’s NDA for ubrogepant, an oral CGRP receptor antagonist for the acute treatment of migraine, with launch expected in the first half of 2020.

OTHER DEVELOPMENTS

On June 25, 2019, AbbVie Inc. and Allergan plc announced that the companies have entered into a definitive transaction agreement under which AbbVie will acquire Allergan in a cash and stock transaction for a transaction equity value of approximately $63 billion, based on the closing price of AbbVie’s common stock of $78.45 on June 24, 2019.

FULL YEAR 2019 GUIDANCE

ADDITIONAL SECOND QUARTER DETAILS

Due to the proposed acquisition of Allergan by AbbVie, Allergan is not hosting a conference call to discuss its second quarter results. For additional materials related to Allergan’s second quarter results, please visit Allergan’s Investor Relations website at https://www.allergan.com/investors/events-presentations.

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 March 31, 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

To the extent that the earnings guidance contained, referred to or summarized in this press release constitute a profit forecast for the purposes of Rule 28 of the Irish Takeover Panel Act, Takeover Rules, 2013, such guidance will (unless the Irish Takeover Panel consents otherwise) be reported on in accordance with that rule in the proxy statement. Except as described in the previous sentence, 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