Shares of Allergan (NYSE: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 (NYSE:ABBV), 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.
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.
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 (NASDAQ:RVNC) 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.