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Behind Botox-Maker Allergan's Rosy Numbers Lurk a Couple of Dark Clouds

Allergan (AGN)'s Q4 earnings call contained some curious guidance on expected revenues for Latisse, its eyelash-lengthening drug that might also be a cure for baldness: $100 million for 2011. Allergan didn't explain how it would get that $100 million, which was interesting because in Q4 2010, the drug's sales slipped 33% to $17 million -- a decline that suggests $100 million is a long way away.

True, last year Latisse earned $81.8 million in revenue, up 33 percent from its 2009 launch year. But the economy was stronger in Q4 than it was at any time in the last two years, and women should have been feeling richer and more self-indulgent. Plus, as I've noted before, Allergan's Latisse marketing with Claire Danes is quite splendid.

CEO David Pyott told investors that the Latisse decline was due to "stocking" -- hoarding by retail and wholesalers -- from previous quarters and because of the heavy discounting the company has done to promote the product. Still, if discounting can't move the needle, what will?

Uncertainty over Latisse is not the only cloud on Allergan's horizon:

None of this is too much of a worry for Allergan, as Botox is still a juggernaut: It added another 7.7 percent increase in revenues to $2.3 billion last year. But it shows that there are still risks and uncertainties in Allergan's business that the company is not quite in control of.


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