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31 janvier, 2008 13:11

A strong sales outlook for Botox and breast implants helped Allergan Inc. shares recover from an early morning dive prompted by soft 2008 profit guidance and news that the company's experimental glaucoma treatment failed a late-stage study.

Irvine, Calif.-based Allergan beat Wall Street's fourth-quarter expectations on a broad mix of product sales. But, the company also said its first-quarter profit will fall short of Wall Street forecasts and its drug candidate memantine failed another study.

The stock shed as much as $4.04, to $61, earlier in the trading session. But by close, shares were down only 67 cents, or 1 percent, to $64.37 as investors decided the profit outlook was conservative and looked favorably on Allergan's revenue guidance, which includes sales increases for Botox, breast implants and eye care products.

"Though the high end of initial 2008 profit guidance only "captures" current Street consensus, this smells like the usual "under-promise, over-deliver" game that Allergan management has mastered," said Oppenheimer & Co. analyst Elliot Wilbur, in a note to investors.

He and several other analysts agreed the guidance appears conservative and the revenue outlook leaves the door open for upside to estimates. Wilbur reaffirmed a "Perform" rating with a $75 price target.

In 2008, the company expects Botox sales to range from $1.37 billion to $1.42 billion, and breast implant sales to range from $330 million to $350 million. Obesity treatment product sales are forecast between $315 million and $350 million.

Citi analyst Andrew Swanson reaffirmed a "Buy" rating and $78 price target, citing the company's "aggressive" sales targets.

"While recent attention, largely due to the Inamed acquisition, has focused on Allergan as an aesthetics company, the company's core ophthalmology franchise provides strong and steady growth," he said, in a note to investors. "Allergan also has one of the richest pipelines of products in the industry, many of which have significant synergies with exiting products either by addressing similar markets or by leveraging current products."

The company gets about 50 percent of its revenue from eye care products, which several analysts view as a solid market and less prone to downturns on broader economic concerns than are elective cosmetic procedures.

Meanwhile, Allergan's chief competitor in the breast implant market, Santa Barbara, Calif.-based Mentor Corp., will report its fiscal 2008 third-quarter results Thursday.