Allergan Says Valeant Disclosures Continue To Be Insufficient And Inconsistent

(RTTNews) - Botox maker Allergan Inc (AGN) commented on Valeant Pharmaceuticals International, Inc.'s (VRX, VRX.TO) release of its second quarter 2014 earnings results. Allergan said its financial advisors and forensic accountants analyzed Valeant's reported financial and operating results, identifying numerous inconsistencies and omissions.

In addition, Valeant's investor presentation failed to provide investors with sufficient relevant information to gauge the true performance of Valeant's business or operations.

In Allergan's view, Valeant's ongoing failure to provide complete, fully transparent information and relevant supporting data for its performance remains a significant and growing concern among Allergan's stockholders and the overall investment community. At the same time, there continues to be an overwhelming divergence between Valeant's reported GAAP and non-GAAP results, additionally highlighting the opaqueness of Valeant's financial reporting.

Given that a substantial portion of Valeant's hostile exchange offer for Allergan's stock consists of Valeant stock, it is crucial that Allergan's stockholders have all of the information necessary to evaluate the true performance of Valeant's business, and consequently, Valeant's equity.

Allergan stated that Valeant failed to provide quantitative price/volume sales analysis and market share statistics for its Bausch & Lomb business. Valeant provided misleading disclosures regarding sales for its top 20 products. Valeant made contradicting statements about the facial injectables business sold to Galderma and its potential impact on guidance.

Allergan noted that Valeant's revised financial outlook validates Allergan's belief that growth is declining at Valeant and that its business model is unsustainable.

Allergan said Valeant included future acquisitions in its guidance, thereby confirming that Valeant does not have sufficient organic growth and needs to rely on acquisitions.

Valeant refused to update its synergy forecasts for Allergan despite acknowledging that it would support several of Allergan's initiatives, making it highly unlikely that Valeant will realize its purported $2.7 billion synergy assumption, Allergan said.

But, Allergan said that it expects to produce double-digit sales growth and non-GAAP earnings per share compounded annual growth of greater than 20 percent over the next five years.