THE BUSINESSWEEK 50 RANKINGS + 25

52

Allergan

Allergan wants to be the king of the booming market for cosmetic surgeries—or “medical aesthetics,” as it prefers to call it. The Irvine (Calif.) company was once primarily a maker of contact lenses, a business it spun off in 2002. Now it’s best known for the blockbuster wrinkle-reducer Botox, which passed $1 billion in sales last year. Allergan had other good news in 2006: In November the FDA approved the sale of silicone breast implants, a business Allergan had entered earlier through its $3.2 billion acquisition of Inamed. Earnings, adjusted for purchased R&D and other special items, climbed more than 30% last year, to $580.3 million, on sales of $3.1 billion. CEO David Pyott is predicting another year of double-digit earnings growth in 2007, thanks to new products such as Juvéderm, a gel doctors inject in the face to smooth out wrinkles, the dry-eye remedy Restasis, and the lap-Band System, a silicone ring that restricts food entry into the stomachs of morbidly obese people.

Overall Grade

A-

Market Data

AGN

Market Value
(2/28/2007)

$16.9 Billion

Profitability*

28.7%

B

Sales Growth Rate**

19.4%

B

12-Month Sales

$3.1 Billion

12-Month Net Income

$0.58*** Billion

Total Return Past 12 Months

3.6%

Past 36 Months

29.2%

Economic SectorHealth Care
IndustryPharmaceuticals
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.
***Inclusion of a one-time charge for purchased in-process R&D and other additional special items would have resulted in a loss of $127.4 million.

David I. Pyott

David I. Pyott, 53

CEO since 1998


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Data as of 2/28/07 provided by Standard & Poor's Compustat