Allergan Inc.'s (AGN) first-quarter net income more than doubled amid prior- year charges as the company reported strong international sales of its Botox wrinkle treatment.
The news helped send shares up $2.10, or 4%, to $56.42.
The eye- and skin-care products company said net income was $111.4 million, or 36 cents share, compared with $43.8 million, or 14 cents share, a year earlier. Excluding items, largely acquisition-related, earnings rose to 53 cents a share from 46 cents.
Revenue jumped 23% to $1.08 billion, as total product net sales surged 25% to $1.06 billion.
Allergan had predicted in January earnings of 50 cents to 51 cents a share, below analysts' then-expectations, on total product net sales of $1.04 billion to $1.07 billion. The latest mean estimates of analysts polled by Thomson Reuters were for earnings of 52 cents a share on total revenue of $1.06 billion.
Gross margin rose to 83.1% from 82.7%.
Eye-care pharmaceuticals sales rose 22% while Botox sales climbed 18%.
"The strength of our reimbursed pharmaceutical businesses offset the marginal impact on our elective product lines as the U.S. economy showed signs of softening and consumers adjusted their spending," Chairman and Chief Executive David E.I. Pyott said. He added Botox sales are growing at double the rate international, even accounting for the weaker dollar, than in the U.S.
Concerns that a sagging economy will slow consumer spending for cosmetic medical procedures have been weighing on Allergan. The bulk of the company's revenue involves treatment of medical conditions such as glaucoma or neurological problems, where consumer confidence doesn't drive sales, but Allergen estimates that one-third of sales are tied to elective procedures.
Allergan on Wednesday boosted its 2008 earnings forecast by a penny to $2.55 to $2.59 a share and still expects total product net sales of $4.4 billion to $ 4.58 billion.
For the second quarter, Allergan sees earnings between 62 cents and 63 cents a share on product sales of $1.13 billion to $1.16 billion. Analysts were expecting earnings, excluding items, of 63 cents a share on total revenue of $ 1.13 billion.
Allergan has also been dealing with some negative Botox news of late. A Jefferies analyst recently credited a study published in the Journal of Neuroscience for sparking a slide in the company's share price. The Italian study suggested a form of botulinum toxin injected into rats' whisker muscles migrated to the brain. It has been assumed that botox - a protein derived from botulinum toxin, a poisonous naturally occurring substance - generally stayed put once injected.
The Food and Drug Administration announced in February that it was conducting a safety review of Botox and a similar product following reports of deaths and breathing problems in some patients. Botox is the only drug of its kind that the FDA has approved as an antiwrinkle therapy. Medicis Pharmaceutical Corp. (MRX) was expected to launch a rival drug, Reloxin, later this year but has encountered regulatory setbacks.