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Allergan looks to find buyer for Lap-Band unit in first half of 2013

February 05, 2013|By Chad Terhune
  • Allergan wants to sell its slumping Lap-Band unit this year. Above, a file photo of an Allergan scientist at the company's Irvine headquarters.
Allergan wants to sell its slumping Lap-Band unit this year. Above, a file… (Mark Boster / Los Angeles…)

Allergan Inc. said it expects to sign a deal to sell its troubled Lap-Band weight-loss unit in the first half of this year as the Irvine company pursues growth from other products and recent acquisitions.

The Botox maker, which had previously disclosed it was considering a sale of its "obesity intervention" business, updated investors on that process Tuesday when it announced fourth-quarter results.

Allergan said it would consider offers for the weight-loss business and predicted it would sign a sales agreement in the first half of 2013. The company said it expects to incur "a disposal loss" in the first quarter related to a write-down of the assets for sale.

"Shedding Lap-Band will boost overall growth," David Pyott, Allergan's chairman and chief executive, said on a conference call with analysts and investors. "We are dynamically managing our portfolio to drive long-term sales growth."

The company said Lap-Band revenue fell for the sixth consecutive quarter. Sales for the obesity intervention business, which includes Lap-Band, declined 22% to $36.8 million in the fourth quarter of 2012 compared with the same period a year earlier.

The Lap-Band is a silicone ring that is implanted around the stomach to discourage patients from overeating.

Overall, Allergan reported that fourth-quarter profit increased 16% to $324.2 million, or $1.06 a share, compared with $279.8 million, or 90 cents a share, a year earlier. Revenue in the quarter grew 8% to $1.51 billion.

Sales of Botox rose 14% in the quarter to $474.6 million. Last month, Allergan said it had agreed to acquire MAP Pharmaceuticals Inc., which develops therapies for migraine headaches, for $958 million.

Shares of Allergan were up $1.36, or 1%, to $106.43 in midday trading Tuesday.

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