October 9, 2014 / 2:58 PM / 3 years ago

UPDATE 2-Allergan says 3rd qtr and 2014 profit to beat expectations

3 Min Read

(Adds analyst comments, share price details)

Oct 9 (Reuters) - Botox maker Allergan Inc said on Thursday it expects to report third-quarter profit that is more than 20 percent higher than it previously anticipated, which it said bolsters its contention that an unsolicited takeover offer by Valeant Pharmaceuticals Inc undervalues the company.

Allergan shares were up 0.3 percent at $191.09 on Thursday morning, building slightly on gains made this week after Reuters reported that the company is also a target of Actavis Plc .

Valeant and Pershing Square Capital Management were also preparing to raise their bid this week, Reuters and other news organizations reported, which has also boosted shares.

Allergan stock has gained about 15 percent since Sept. 22 when Reuters and others cited unnamed sources saying the company was considering a possible acquisition of Salix Pharmaceuticals . Those merger discussions have since dropped off, sources have said.

Pursuing acquisitions is part of Allergan's strategy to fend off the $53 billion hostile takeover by Valeant. Allergan has criticized the company's model of growing through acquisitions and said drastic cuts in research and development would minimize Allergan's potential.

"Today's announced expectations for the third quarter and updated future outlook further demonstrate that there is a vast value gap between Valeant's offer and the intrinsic value of Allergan," Allergan Chief Executive David Pyott said in a statement.

Allergan estimated adjusted earnings per share of $1.76 to $1.78 for the quarter ended Sept. 30, higher than its previous forecast of $1.44 to $1.47, helped by an increase in market share and product approvals.

It said that its restructuring, which includes job cuts, will help earnings starting in the fourth quarter and throughout 2015. Analysts on average were expecting a third-quarter profit of $1.48 per share, according to Thomson Reuters I/B/E/S.

Allergan also forecast full-year adjusted earnings of $6.20 to $6.25 per share, beating analysts' estimates of $5.81. For 2015, the company forecast earnings of $8.60 per share and for 2016, it put earnings at $10.25 per share.

The company said it also expects a 14-15 percent increase in product net sales for the year and 17 percent in the quarter.

One Wall Street analyst pointed to Allergan's dermal fillers, injectible treatments that are marketed under names including Juvederm and Juvederm Voluma, as the source of the unexpectedly large sales increase.

"We believe Allergan's fillers business (and the Voluma launch) could again represent a significant driver of this upside," JP Morgan analyst Chris Schott wrote in a research note. (Reporting by Amrutha Penumudi in Bangalore and Caroline Humer in New York; editing by Saumyadeb Chakrabarty, Savio D'Souza and Matthew Lewis)

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