Bloomberg News

Allergan CEO Seeks to ‘Reload Pipeline’ With Neurology Deals

October 26, 2011

(Updates with closing shares in seventh paragraph.)

Oct. 26 (Bloomberg) -- Allergan Inc., maker of the Botox wrinkle smoother, is on the lookout for deals in neurology and urology with about $1 billion generated in free cash this year, Chief Executive Officer David Pyott said.

“Beyond executing launches against product approvals, the other key angle and focus is reloading the R&D pipeline,” Pyott said in a telephone interview today. One strategy is through internal research and development, he said. “Beyond that, we’re always looking on the outside to say, ‘What else could we be acquiring or licensing?’”

Allergan generated $1.3 billion in third-quarter sales, the Irvine, California-based company said today in a statement. The company’s top-seller, Botox, is approved for uses such as migraines and urinary incontinence in addition to its cosmetic applications. Pyott said Allergan may seek deals to expand in those areas, citing as an example a collaboration with MAP Pharmaceuticals Inc. announced in January on an experimental medicine for acute migraines, called Levadex.

Allergan defines free cash flow as operating cash flow, minus capital expenditures and excluding upfront payments.

Allergan’s Deals

Allergan has made 14 deals since Pyott became CEO in January 1998, with an average disclosed size of $401.8 million, according to Bloomberg data. The largest was the 2005 purchase of Inamed Corp. for $3.2 billion, giving Allergan the Juvederm facial filler, breast implants and the Lap-Band surgical device for obesity.

“We’re becoming much broader than just the Botox company,” Pyott said. “Not everything can be invented in our labs.”

Allergan fell 3.7 percent to $83.74 at the close in New York, the biggest single-day decline since Aug. 10. The shares have gained 22 percent this year.

The company today forecast fourth-quarter profit that fell short of analysts’ estimates. Earnings, excluding one-time items, will be 97 cents to 99 cents a share, Allergan said, missing analysts’ $1.01 average estimate.

--With assistance from Alex Nussbaum in New York. Editors: Andrew Pollack, Angela Zimm

To contact the reporter on this story: Meg Tirrell in New York at

To contact the editor responsible for this story: Reg Gale at

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