Please ensure Javascript is enabled for purposes of website accessibility

Allergan Reports Fourth-Quarter 2019 Results That Plow Past Expectations

By Cory Renauer - Feb 10, 2020 at 12:24PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The maker of Botox appears to be on an upswing just ahead of its megamerger with AbbVie.

Shares of Allergan (AGN) received a slight bump on Monday morning in response to a fourth-quarter earnings report that exceeded expectations on the top and bottom lines. Shares of AbbVie (ABBV 0.37%), a larger drugmaker with plans to buy Allergan in the first quarter, also ticked up slightly.

Allergan's total revenue climbed 6.6% to $4.35 billion, which was 6% more than analysts' average expectation. On the bottom line, adjusted earnings exceeded consensus estimates by 13% and reached $5.22 per share.

Drugs and money.

Image source: Getty Images.

Ups and downs 

During the last three months of 2019, sales of Botox for cosmetic purposes rose 19.8% if you exclude the impact of fluctuating foreign exchange rates. As reported, sales of the entire botulinum toxin franchise rose 7.9% year over year to reach $1.02 billion.

Sales of the company's second-best-selling product, Restasis for dry eye disease, fell 4% to $327.7 million. As the company's ability to maintain market exclusivity for cyclosporine-containing eye drops erodes, AbbVie can probably expect the Restasis brand to decline further.

Looking ahead

AbbVie already received conditional approval from European regulators to acquire Ireland-domiciled Allergan. To assuage concerns that the deal will be anticompetitive, the pair will divest some minor assets, which should pave the way for them to complete the acquisition before the end of March. 

Unfortunately for AbbVie, it looks like the Botox brand could face new competition in the cosmetic services arena before the end of 2020. Less than a week ago, Revance Therapeutics (RVNC 4.90%) took a step toward taking a bite out of Allergan's largest revenue stream when the FDA agreed to review its application for DAXI, another botulinum toxin injection, for the treatment of frown lines. 

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Allergan plc Stock Quote
Allergan plc
AbbVie Inc. Stock Quote
AbbVie Inc.
$142.60 (0.37%) $0.52
Revance Therapeutics, Inc. Stock Quote
Revance Therapeutics, Inc.
$22.49 (4.90%) $1.05

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.