10 May

Behind Allergan’s US Specialized Therapeutics Segment in 1Q17

WRITTEN BY Mike Benson

Allergan’s US Specialized Therapeutics segment

Allergan’s (AGN) US Specialized Therapeutics segment sells branded products through its eye care, medical aesthetics, medical dermatology, and neuroscience and urology franchises. In 1Q17, the segment’s revenues rose 14.1% to $1.48 billion, as compared to $1.30 billion in 1Q16.

Behind Allergan’s US Specialized Therapeutics Segment in 1Q17

Eye care and medical aesthetics in 1Q17

Eye care revenues rose to $553.1 million in 1Q17, representing a 3.8% rise over 1Q16. This growth was driven by the strong performance of Restasis, Alphagan-Combigan, Ozurdex, eye drops, and other eye care products, partially offset by lower sales of Lumigan-Ganfort.

Allergen’s medical aesthetics business includes facial aesthetics, medical dermatology products, and a wide range of silicone gel and saline breast implants. Facial aesthetics reported revenues of $318.7 million in 1Q17, as compared to $279.4 million in 1Q16. The product portfolio includes Botox Cosmetics, which reported an 11.1% increase in sales in 1Q17, fillers, which reported 16.7% growth, and Kybella.

Plastic surgery products reported revenues of $54.3 million in 1Q17, representing a growth of 12.9%, as compared to $48.1 million in 1Q16. This franchise’s sales were driven by an increase in revenues from breast implants and breast reconstruction products, partially offset by lower sales of other plastic surgery products.

The regenerative franchise including Alloderm and other products reported revenues of $75.5 million in 1Q17. Skincare product revenues fell to $41.6 million in 1Q17, following the lower sales of Latisse products.

Medical dermatology performance in 1Q17

Medical dermatology reported revenues of $86.6 million during 1Q17, as compared to $69.0 million in 1Q16. This franchise has advanced dermatology products to treat skin diseases and improve skin appearance. In 1Q17, the franchise reported revenue growth for Aczone, Tazorac, and Botox Hyperhidrosis, and other dermatology products.

Neuroscience and urology performance in 1Q17

Revenues from the neuroscience and urology franchise rose ~9.1% to $334.7 million in 1Q17, as compared to $306.8 million in 1Q16, mainly driven by increased sales of Botox Therapeutics, partially offset by lower Rapaflo sales.

To divest risk, investors can consider ETFs like the SPDR S&P Pharmaceuticals ETF (XPH), which has 5.1% of its total assets in Allergan. The SPDR S&P Pharmaceuticals ETF also has 5.1% of its total assets in Eli Lilly (LLY), 4.5% in Pfizer (PFE), and 4.6% in Merck (MRK).

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