That loss was caused mostly by a $600 million settlement Allergan paid to the Department of Justice to settle allegations it promoted Botox for the unapproved use of migraine treatment, plus a bunch of other one-off expenses. So Allergan produced a set of through-the-looking glass "non-GAAP" income statements in parallel to their actual income statements, in which all that unpleasantness with the feds was backed out. Abracadabra! Allergan turns a profit even when it loses money.
Allergan is also probably losing money on its high-profile Latisse eyelash lengthener, which you've seen Brooke Shields advertising on TV. Latisse made only $21.7 million last quarter, down 0.6 percent. The company said it expect to sell just $90 million of Latisse this year -- a sum so small that the marketing and selling costs are probably greater than its revenues.
You don't have to spend too much time poking around hair-loss bulletin boards to realize that there's a huge untapped market for a baldness cure. The existing meds -- McNeil's Rogaine and Merck (MRK)'s Propecia -- basically don't work. (Ignore those claims about 85 percent of men regrowing hair -- if the stuff worked in any meaningful way you wouldn't be surrounded by bald men.)
Botox and Latisse both illustrate a lesson that all managers should remember: it's good to always keep multiple irons in the fire.
- Does Botox Prevent Migraines or Is It Just Acupuncture?
- Crime Pays: How Allergan's Illegal Botox Promotion Is Just the Cost of Doing Business
- Cure for Baldness Stalled Amid Legal Wrangling
- In Allergan's Search for Baldness Cure, Does the Stumptailed Macaque Hold the Key?
- Is Allergan's Latisse Also a Cure for Baldness?