(Adds analyst comments, details on Allergan approach to Shire)
By Ransdell Pierson
NEW YORK May 7 Allergan Inc reported
better-than-expected first-quarter profit on strong sales of
Botox and other products and said it was reviewing an
unsolicited $47 billion takeover bid from Valeant
Pharmaceuticals International Inc.
In reporting its quarterly results on Wednesday, Allergan
noted it has in place a one-year stockholder rights plan,
commonly called a poison pill, meant to give the company more
time to weigh the offer.
Excluding special items, Allergan earned $1.18 per share,
well above the average analysts' forecast of $1.13 per share
compiled by to Thomson Reuters I/B/E/S.
The company also raised its full year profit forecast,
excluding special items, to between $5.64 and $5.73 per share.
In February, it had predicted $5.36 to $5.48 per share.
"Allergan reported a solid start to 2014," Wells Fargo
analyst Larry Biegelsen said in a research note. But he said
Wall Street's focus will remain on Valeant's hostile bid.
Allergan earned $257 million, or 85 cents per share, in the
quarter. That compared with $12.5 million, or 4 cents, in the
year-earlier period, when it took a big charge for discontinued
David Maris, an analyst with BMO Capital Markets, said
Allergan's strong performance shows the company is well suited
to remain independent.
"With Allergan hitting on all cylinders and topping
expectations, we think that it is obvious that tinkering with
Allergan's formula will only prove to be a distraction and, in
our opinion, damage a business that is already performing well,"
Global company sales rose 13 percent to $1.62 billion,
topping Wall Street expectations of $1.60 billion. Botox sales
rose 9.6 percent to $502 million in the quarter, while
prescription eye care drugs rose 9.2 percent to $730 million.
Company shares slipped 1.3 percent in morning trading on the
New York Stock Exchange amid sharp declines for the drug sector.
Valeant teamed up with activist investor William Ackman on
April 21 to make the offer for Allergan. Ackman's Pershing
Square Capital Management had accumulated 9.7 percent of
Allergan's common stock, making it the company's largest
Valeant, which is based in Canada and therefore has a far
lower corporate tax rate than the United States, has been on a
buying spree since 2010 and last year acquired contact lens
maker Bausch & Lomb Holdings.
Months before Valeant's offer, Allergan itself had
approached drugmaker Shire Plc about a possible takeover
but was rebuffed, Reuters reported last month, citing people
familiar with the matter.
The preliminary approach for Shire, which is based in
Ireland, did not progress to serious discussions between the two
companies, the sources said. By buying Shire and relocating to
Ireland, Allergan would have been able to lower its own tax
rate, sources said.
Representatives for Allergan and Shire declined to comment
on the Reuters report.
(Reporting by Ransdell Pierson; Editing by Jeffrey Benkoe and W