Allergan Q3 Results Top View; Valeant Prepared To Raise Offer For Botox Maker

(RTTNews) - Botox maker Allergan Inc. (AGN) Monday reported increased profit and revenue for the third-quarter that topped Wall Street estimates, and lifted its earnings forecast for the year.

Meanwhile, Valeant Pharmaceuticals International, Inc. (VRX) (VRX.TO), which has been pursuing Allergan for months, said it is prepared to improve its offer and provide a value of at least $200 per share to Allergan shareholders.

AGN which closed up 0.5 percent on Friday at $184.21, gained 1.7 percent in pre-market activity. VRX, which settled up 0.9 percent, was unchanged.

Allergan's net earnings attributable to company increased to $312.5 million or $1.03 per share from $299.8 million or $1.00 per share, last year.

Adjusted net earnings attributable to Allergan was $1.78 per share, while it totaled $1.23 per share last year.

On average, 16 analysts polled by Thomson Reuters expected the company to report earnings per share of $1.68 for the quarter. Analysts' estimates typically exclude special items.

Revenues increased to $1.82 billion from $1.56 billion. Analysts expected revenue of $1.78 billion for the quarter.

Total product sales increased 17.2 percent to $1.791 billion and improved 17.6 percent on a constant currency basis.

Total specialty pharmaceuticals net sales increased 14.3 percent, while Total core medical devices net sales increased 30.4 percent from last year.

Allergan also announced that its Board has declared a third quarter dividend of $0.05 per share to stockholders on record November 20, payable December 11.

Looking ahead to the fourth quarter, Allergan expects adjusted earnings per share attributable to stockholders of $1.80 to $1.83, while total product net sales are expected between $1.85 billion and $1.92 billion, excluding any future anticipated revenue from the transition services agreements related to the sale of the obesity intervention business.

Analysts expect the company to report fourth-quarter earnings per share of $1.74 on revenue of $1.87 billion.

For full year 2014, Allergan expects non-GAAP earnings per share attributable to stockholders to be between $6.27 and $6.30. Analysts expect the company to report fiscal 2014 profit per share of $6.12 on revenue of $7.15 billion.

Total product net sales are estimated to be between $7.08 billion and $7.16 billion, excluding any future anticipated revenue from the transition services agreements related to the sale of the obesity intervention business.

The previous projection was for adjusted earnings per share between $6.20 and $6.25, and product net sales growth of between 14 and 15 percent.

Allergan is being pursued by Valeant for months now. Valeant, along with billionaire investor William Ackman's hedge fund Pershing Square, started a takeover battle in April by making a bid to acquire Allergan for $46 billion in cash and stock. Pershing Square is the largest shareholder in Allergan with a 9.7 percent stake.

Valeant later sweetened its bid to about $53 billion. However, Allergan repeatedly spurned the offers stating it grossly undervalued the company. Allergan called Valeant's business model unsustainable and said that a deal with Valeant would hurt its research and development program.

Allergan today issued an update on the unsolicited proposal made by Valeant.

On August 1, Allergan filed a lawsuit against Valeant, Pershing Square Capital Management, L.P. and its principal, William Ackman, alleging that Valeant, Pershing Square and Ackman violated federal securities laws prohibiting insider trading, engaged in other fraudulent practices, and failed to disclose legally required information.

On September 15, Allergan said it reached an agreement with Pershing Square and Valeant under which Allergan agreed to hold the Special Meeting of Stockholders on December 18, and Pershing Square and Valeant dismissed their pending litigation before the Delaware Court of Chancery.

Separately, Valeant boosted its offer for Allergan. Allergan's shares were trading at $110 at the beginning of the year, and $117 before Valeant made the offer.

"The market and peer group are flat this year. Given this, it is unimaginable that Allergan would be trading anywhere near where it is now without our offer, even with the cost cuts you belatedly put in place in direct response to us," Valeant said in a letter to the Board of Directors of Allergan.

Valeant believes its own stock is trading at artificially low levels and that a trading price of $150 is only 15 times analyst consensus for 2015 cash earnings per share.

Stating that it is prepared to improve its offer, Valeant said it is confident that an increase in its stock price, and in consideration, will provide that value.

Reports had indicated earlier this month that Valeant and hedge fund Pershing Square were in talks to boost their offer for Allergan Inc. (ALGN) by $15 per share.